Correlation Between Norion Bank and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both Norion Bank and SolTech Energy 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 Norion Bank and SolTech Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norion Bank and SolTech Energy Sweden, you can compare the effects of market volatilities on Norion Bank and SolTech Energy 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 Norion Bank with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norion Bank and SolTech Energy.
Diversification Opportunities for Norion Bank and SolTech Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Norion and SolTech is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Norion Bank and SolTech Energy Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolTech Energy Sweden and Norion Bank 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 Norion Bank are associated (or correlated) with SolTech Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolTech Energy Sweden has no effect on the direction of Norion Bank i.e., Norion Bank and SolTech Energy go up and down completely randomly.
Pair Corralation between Norion Bank and SolTech Energy
Assuming the 90 days trading horizon Norion Bank is expected to generate 0.5 times more return on investment than SolTech Energy. However, Norion Bank is 1.98 times less risky than SolTech Energy. It trades about -0.04 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.07 per unit of risk. If you would invest 4,665 in Norion Bank on September 3, 2024 and sell it today you would lose (730.00) from holding Norion Bank or give up 15.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norion Bank vs. SolTech Energy Sweden
Performance |
| Timeline |
| Norion Bank |
| SolTech Energy Sweden |
Norion Bank and SolTech Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norion Bank and SolTech Energy
The main advantage of trading using opposite Norion Bank and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norion Bank position performs unexpectedly, SolTech Energy 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 SolTech Energy will offset losses from the drop in SolTech Energy's long position.| Norion Bank vs. AstraZeneca PLC | Norion Bank vs. Investor AB ser | Norion Bank vs. Investor AB ser | Norion Bank vs. Atlas Copco AB |
| SolTech Energy vs. Eolus Vind AB | SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Positions Ratings 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 |