Correlation Between OptiCept Technologies and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both OptiCept Technologies 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 OptiCept Technologies and SolTech Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptiCept Technologies AB and SolTech Energy Sweden, you can compare the effects of market volatilities on OptiCept Technologies 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 OptiCept Technologies with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptiCept Technologies and SolTech Energy.
Diversification Opportunities for OptiCept Technologies and SolTech Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OptiCept and SolTech is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB 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 OptiCept Technologies 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 OptiCept Technologies AB 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 OptiCept Technologies i.e., OptiCept Technologies and SolTech Energy go up and down completely randomly.
Pair Corralation between OptiCept Technologies and SolTech Energy
Assuming the 90 days trading horizon OptiCept Technologies AB is expected to generate 1.01 times more return on investment than SolTech Energy. However, OptiCept Technologies is 1.01 times more volatile than SolTech Energy Sweden. It trades about -0.07 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.13 per unit of risk. If you would invest 675.00 in OptiCept Technologies AB on September 12, 2024 and sell it today you would lose (154.00) from holding OptiCept Technologies AB or give up 22.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OptiCept Technologies AB vs. SolTech Energy Sweden
Performance |
| Timeline |
| OptiCept Technologies |
| SolTech Energy Sweden |
OptiCept Technologies and SolTech Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptiCept Technologies and SolTech Energy
The main advantage of trading using opposite OptiCept Technologies and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies 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.| OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Trelleborg AB | OptiCept Technologies vs. Troax Group AB |
| SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden | SolTech Energy vs. KABE Group AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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