Correlation Between Solar Enertech and Applied Digital

Can any of the company-specific risk be diversified away by investing in both Solar Enertech and Applied Digital 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 Solar Enertech and Applied Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Solar Enertech and Applied Digital

0.0

Correlation Coefficient

Solar Enertech  Applied Digital

Pay attention - limited upside

The 3 months correlation between Solar and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solar Enertech Corp and Applied Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Digital and Solar Enertech 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 Solar Enertech Corp are associated (or correlated) with Applied Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Digital has no effect on the direction of Solar Enertech i.e., Solar Enertech and Applied Digital go up and down completely randomly.

Pair Corralation between Solar Enertech and Applied Digital

If you would invest  550.00  in Applied Digital on May 8, 2025 and sell it today you would earn a total of  935.00  from holding Applied Digital or generate 170.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Solar Enertech Corp  vs.  Applied Digital

Solar Enertech Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Solar Enertech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Solar Enertech is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Applied Digital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Digital are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solar Enertech and Applied Digital

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

The idea behind Solar Enertech Corp and Applied Digital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.