Correlation Between SolarEdge Technologies and SBA Communications
Can any of the company-specific risk be diversified away by investing in both SolarEdge Technologies and SBA Communications 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 SolarEdge Technologies and SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarEdge Technologies and SBA Communications Corp, you can compare the effects of market volatilities on SolarEdge Technologies and SBA Communications 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 SolarEdge Technologies with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarEdge Technologies and SBA Communications.
Diversification Opportunities for SolarEdge Technologies and SBA Communications
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SolarEdge and SBA is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and SolarEdge Technologies 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 SolarEdge Technologies are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of SolarEdge Technologies i.e., SolarEdge Technologies and SBA Communications go up and down completely randomly.
Pair Corralation between SolarEdge Technologies and SBA Communications
Given the investment horizon of 90 days SolarEdge Technologies is expected to under-perform the SBA Communications. In addition to that, SolarEdge Technologies is 2.17 times more volatile than SBA Communications Corp. It trades about -0.05 of its total potential returns per unit of risk. SBA Communications Corp is currently generating about -0.04 per unit of volatility. If you would invest 33,361 in SBA Communications Corp on January 25, 2024 and sell it today you would lose (13,531) from holding SBA Communications Corp or give up 40.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarEdge Technologies vs. SBA Communications Corp
Performance |
| Timeline |
| SolarEdge Technologies |
| SBA Communications Corp |
SolarEdge Technologies and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarEdge Technologies and SBA Communications
The main advantage of trading using opposite SolarEdge Technologies and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| SolarEdge Technologies vs. Sunnova Energy International | SolarEdge Technologies vs. Nextracker Class A | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Maxeon Solar Technologies |
| SBA Communications vs. Digital Realty Trust | SBA Communications vs. Hannon Armstrong Sustainable | SBA Communications vs. EPR Properties |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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