Correlation Between Fortum Oyj and SolarWindow Technologies
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and SolarWindow Technologies 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 Fortum Oyj and SolarWindow Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortum Oyj ADR and SolarWindow Technologies, you can compare the effects of market volatilities on Fortum Oyj and SolarWindow Technologies 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 Fortum Oyj with a short position of SolarWindow Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and SolarWindow Technologies.
Diversification Opportunities for Fortum Oyj and SolarWindow Technologies
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortum and SolarWindow is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj ADR and SolarWindow Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarWindow Technologies and Fortum Oyj 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 Fortum Oyj ADR are associated (or correlated) with SolarWindow Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarWindow Technologies has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and SolarWindow Technologies go up and down completely randomly.
Pair Corralation between Fortum Oyj and SolarWindow Technologies
Assuming the 90 days horizon Fortum Oyj ADR is expected to under-perform the SolarWindow Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fortum Oyj ADR is 6.11 times less risky than SolarWindow Technologies. The pink sheet trades about -0.02 of its potential returns per unit of risk. The SolarWindow Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 24.00 in SolarWindow Technologies on September 2, 2024 and sell it today you would earn a total of 8.00 from holding SolarWindow Technologies or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortum Oyj ADR vs. SolarWindow Technologies
Performance |
| Timeline |
| Fortum Oyj ADR |
| SolarWindow Technologies |
Fortum Oyj and SolarWindow Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and SolarWindow Technologies
The main advantage of trading using opposite Fortum Oyj and SolarWindow Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, SolarWindow Technologies 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 SolarWindow Technologies will offset losses from the drop in SolarWindow Technologies' long position.| Fortum Oyj vs. Constellation Energy Corp | Fortum Oyj vs. Astra Energy | Fortum Oyj vs. Powertap Hydrogen Capital | Fortum Oyj vs. Brenmiller Energy Ltd |
| SolarWindow Technologies vs. BCE Inc | SolarWindow Technologies vs. Axiologix | SolarWindow Technologies vs. Advanced Info Service | SolarWindow Technologies vs. HUMANA INC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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