Correlation Between Data Storage and Soluna Holdings

Can any of the company-specific risk be diversified away by investing in both Data Storage and Soluna Holdings 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 Data Storage and Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Data Storage Corp and Soluna Holdings, you can compare the effects of market volatilities on Data Storage and Soluna Holdings 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 Data Storage with a short position of Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Storage and Soluna Holdings.

Diversification Opportunities for Data Storage and Soluna Holdings

0.66

Correlation Coefficient

Data Storage  Soluna Holdings

Poor diversification

The 3 months correlation between Data and Soluna is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Data Storage Corp and Soluna Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings and Data Storage 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 Data Storage Corp are associated (or correlated) with Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings has no effect on the direction of Data Storage i.e., Data Storage and Soluna Holdings go up and down completely randomly.

Pair Corralation between Data Storage and Soluna Holdings

Given the investment horizon of 90 days Data Storage Corp is expected to under-perform the Soluna Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Data Storage Corp is 2.11 times less risky than Soluna Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Soluna Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Soluna Holdings on March 31, 2025 and sell it today you would lose (9.00) from holding Soluna Holdings or give up 14.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Data Storage Corp  vs.  Soluna Holdings

Data Storage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Storage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Data Storage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Soluna Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soluna Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Soluna Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Data Storage and Soluna Holdings

The main advantage of trading using opposite Data Storage and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Storage position performs unexpectedly, Soluna Holdings 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 Soluna Holdings will offset losses from the drop in Soluna Holdings' long position.

The idea behind Data Storage Corp and Soluna Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.