Correlation Between 9F and Soluna Holdings

Can any of the company-specific risk be diversified away by investing in both 9F 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 9F and Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 9F Inc and Soluna Holdings Preferred, you can compare the effects of market volatilities on 9F 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 9F with a short position of Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 9F and Soluna Holdings.

Diversification Opportunities for 9F and Soluna Holdings

-0.49

Correlation Coefficient

9F  Soluna Holdings

Very good diversification

The 3 months correlation between 9F and Soluna is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding 9F Inc and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred and 9F 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 9F Inc 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 Preferred has no effect on the direction of 9F i.e., 9F and Soluna Holdings go up and down completely randomly.

Pair Corralation between 9F and Soluna Holdings

Considering the 90-day investment horizon 9F is expected to generate 2.85 times less return on investment than Soluna Holdings. In addition to that, 9F is 1.49 times more volatile than Soluna Holdings Preferred. It trades about 0.04 of its total potential returns per unit of risk. Soluna Holdings Preferred is currently generating about 0.18 per unit of volatility. If you would invest  585.00  in Soluna Holdings Preferred on September 3, 2024 and sell it today you would earn a total of  607.00  from holding Soluna Holdings Preferred or generate 103.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

9F Inc  vs.  Soluna Holdings Preferred

9F Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 9F Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, 9F unveiled solid returns over the last few months and may actually be approaching a breakup point.

Soluna Holdings Preferred

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Soluna Holdings Preferred are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical indicators, Soluna Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 9F and Soluna Holdings

The main advantage of trading using opposite 9F and Soluna Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 9F 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 9F Inc and Soluna Holdings Preferred 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.