Correlation Between Innofactor Oyj and Solteq PLC
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Innofactor Oyj vs. Solteq PLC
Performance |
Timeline |
Innofactor Oyj |
Solteq PLC |
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.Innofactor Oyj vs. CapMan Oyj B | Innofactor Oyj vs. HKFoods Oyj A | Innofactor Oyj vs. KONE Oyj | Innofactor Oyj vs. Exel Composites Oyj |
Solteq PLC vs. Innofactor Oyj | Solteq PLC vs. CapMan Oyj B | Solteq PLC vs. HKFoods Oyj A | Solteq PLC vs. KONE Oyj |
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.
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