Correlation Between Solana and OFFICIAL TRUMP

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

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

Diversification Opportunities for Solana and OFFICIAL TRUMP

0.85

Correlation Coefficient

Solana  OFFICIAL TRUMP

Very poor diversification

The 3 months correlation between Solana and OFFICIAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Solana and OFFICIAL TRUMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICIAL TRUMP and Solana 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 Solana are associated (or correlated) with OFFICIAL TRUMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICIAL TRUMP has no effect on the direction of Solana i.e., Solana and OFFICIAL TRUMP go up and down completely randomly.

Pair Corralation between Solana and OFFICIAL TRUMP

Assuming the 90 days trading horizon Solana is expected to generate 2.87 times less return on investment than OFFICIAL TRUMP. But when comparing it to its historical volatility, Solana is 3.55 times less risky than OFFICIAL TRUMP. It trades about 0.3 of its potential returns per unit of risk. OFFICIAL TRUMP is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  757.00  in OFFICIAL TRUMP on February 15, 2025 and sell it today you would earn a total of  513.00  from holding OFFICIAL TRUMP or generate 67.77% return on investment over 90 days.

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

Solana  vs.  OFFICIAL TRUMP

Solana

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Solana are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Solana may actually be approaching a critical reversion point that can send shares even higher in June 2025.

OFFICIAL TRUMP

Risk-Adjusted Performance

Very Weak

Over the last 90 days OFFICIAL TRUMP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, OFFICIAL TRUMP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Solana and OFFICIAL TRUMP

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

The idea behind Solana and OFFICIAL TRUMP 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.