Correlation Between Charwood Energy and Soditech
Can any of the company-specific risk be diversified away by investing in both Charwood Energy and Soditech 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 Charwood Energy and Soditech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charwood Energy SA and Soditech SA, you can compare the effects of market volatilities on Charwood Energy and Soditech 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 Charwood Energy with a short position of Soditech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charwood Energy and Soditech.
Diversification Opportunities for Charwood Energy and Soditech
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charwood and Soditech is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Charwood Energy SA and Soditech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soditech SA and Charwood Energy 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 Charwood Energy SA are associated (or correlated) with Soditech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soditech SA has no effect on the direction of Charwood Energy i.e., Charwood Energy and Soditech go up and down completely randomly.
Pair Corralation between Charwood Energy and Soditech
Assuming the 90 days trading horizon Charwood Energy SA is expected to under-perform the Soditech. But the stock apears to be less risky and, when comparing its historical volatility, Charwood Energy SA is 1.56 times less risky than Soditech. The stock trades about -0.14 of its potential returns per unit of risk. The Soditech SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Soditech SA on October 20, 2024 and sell it today you would earn a total of 8.00 from holding Soditech SA or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charwood Energy SA vs. Soditech SA
Performance |
| Timeline |
| Charwood Energy SA |
| Soditech SA |
Charwood Energy and Soditech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charwood Energy and Soditech
The main advantage of trading using opposite Charwood Energy and Soditech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charwood Energy position performs unexpectedly, Soditech 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 Soditech will offset losses from the drop in Soditech's long position.| Charwood Energy vs. Hydrogene De France | Charwood Energy vs. Hydrogen Refueling Solutions | Charwood Energy vs. Neoen SA | Charwood Energy vs. Hopium SAS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |