Correlation Between SMA Solar and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both SMA Solar and BANK HANDLOWY at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SMA Solar and BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and BANK HANDLOWY, you can compare the effects of market volatilities on SMA Solar and BANK HANDLOWY and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SMA Solar with a short position of BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and BANK HANDLOWY.
Diversification Opportunities for SMA Solar and BANK HANDLOWY
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMA and BANK is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY and SMA Solar is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SMA Solar Technology are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of SMA Solar i.e., SMA Solar and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between SMA Solar and BANK HANDLOWY
Assuming the 90 days horizon SMA Solar Technology is expected to generate 8.4 times more return on investment than BANK HANDLOWY. However, SMA Solar is 8.4 times more volatile than BANK HANDLOWY. It trades about 0.26 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.13 per unit of risk. If you would invest 2,078 in SMA Solar Technology on August 26, 2025 and sell it today you would earn a total of 1,126 from holding SMA Solar Technology or generate 54.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. BANK HANDLOWY
Performance |
| Timeline |
| SMA Solar Technology |
| BANK HANDLOWY |
SMA Solar and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and BANK HANDLOWY
The main advantage of trading using opposite SMA Solar and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, BANK HANDLOWY can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| SMA Solar vs. First Solar | SMA Solar vs. SolarEdge Technologies | SMA Solar vs. Xinyi Solar Holdings | SMA Solar vs. Sunrun Inc |
| BANK HANDLOWY vs. Western Copper and | BANK HANDLOWY vs. Cairo Communication SpA | BANK HANDLOWY vs. Comba Telecom Systems | BANK HANDLOWY vs. CORNISH METALS INC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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