Correlation Between Simpson Manufacturing and Ascent Solar

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

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

Diversification Opportunities for Simpson Manufacturing and Ascent Solar

-0.31

Correlation Coefficient

Simpson Manufacturing  Ascent Solar

Very good diversification

The 3 months correlation between Simpson and Ascent is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol and Simpson Manufacturing 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 Simpson Manufacturing are associated (or correlated) with Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Simpson Manufacturing i.e., Simpson Manufacturing and Ascent Solar go up and down completely randomly.

Pair Corralation between Simpson Manufacturing and Ascent Solar

Considering the 90-day investment horizon Simpson Manufacturing is expected to generate 1.76 times less return on investment than Ascent Solar. But when comparing it to its historical volatility, Simpson Manufacturing is 3.02 times less risky than Ascent Solar. It trades about 0.08 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  252.00  in Ascent Solar Technologies, on September 3, 2024 and sell it today you would earn a total of  15.00  from holding Ascent Solar Technologies, or generate 5.95% return on investment over 90 days.

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

Simpson Manufacturing  vs.  Ascent Solar Technologies,

Simpson Manufacturing

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Simpson Manufacturing are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Simpson Manufacturing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ascent Solar Technol

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ascent Solar Technologies, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Ascent Solar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simpson Manufacturing and Ascent Solar

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

The idea behind Simpson Manufacturing and Ascent Solar Technologies, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.