Correlation Between Innofactor Oyj and Solteq PLC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Innofactor Oyj and Solteq PLC 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 Innofactor Oyj and Solteq PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innofactor Oyj and Solteq PLC, you can compare the effects of market volatilities on Innofactor Oyj and Solteq PLC 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 Innofactor Oyj with a short position of Solteq PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innofactor Oyj and Solteq PLC.

Diversification Opportunities for Innofactor Oyj and Solteq PLC

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Innofactor and Solteq is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Innofactor Oyj and Solteq PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solteq PLC and Innofactor 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 Innofactor Oyj are associated (or correlated) with Solteq PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solteq PLC has no effect on the direction of Innofactor Oyj i.e., Innofactor Oyj and Solteq PLC go up and down completely randomly.

Pair Corralation between Innofactor Oyj and Solteq PLC

Assuming the 90 days trading horizon Innofactor Oyj is expected to generate 0.92 times more return on investment than Solteq PLC. However, Innofactor Oyj is 1.09 times less risky than Solteq PLC. It trades about 0.07 of its potential returns per unit of risk. Solteq PLC is currently generating about 0.0 per unit of risk. If you would invest  110.00  in Innofactor Oyj on August 27, 2024 and sell it today you would earn a total of  60.00  from holding Innofactor Oyj or generate 54.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Innofactor Oyj  vs.  Solteq PLC

 Performance 
       Timeline  
Innofactor Oyj 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Innofactor Oyj are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Innofactor Oyj is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Solteq PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Solteq PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Solteq PLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Innofactor Oyj and Solteq PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Innofactor Oyj and Solteq PLC

The main advantage of trading using opposite Innofactor Oyj and Solteq PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innofactor Oyj position performs unexpectedly, Solteq PLC 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 Solteq PLC will offset losses from the drop in Solteq PLC's long position.
The idea behind Innofactor Oyj and Solteq PLC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios