Correlation Between Solar Alliance and Premium Resources

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

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

Diversification Opportunities for Solar Alliance and Premium Resources

0.0

Correlation Coefficient

Solar Alliance  Premium Resources

Pay attention - limited upside

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

Pair Corralation between Solar Alliance and Premium Resources

If you would invest  840.00  in Premium Resources on April 21, 2025 and sell it today you would earn a total of  55.00  from holding Premium Resources or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Solar Alliance Energy  vs.  Premium Resources

Solar Alliance Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solar Alliance Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Solar Alliance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Premium Resources

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Solar Alliance and Premium Resources

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

The idea behind Solar Alliance Energy and Premium Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.