Correlation Between Raketech Group and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both Raketech Group 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 Raketech Group and SolTech Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raketech Group Holding and SolTech Energy Sweden, you can compare the effects of market volatilities on Raketech Group 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 Raketech Group with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raketech Group and SolTech Energy.
Diversification Opportunities for Raketech Group and SolTech Energy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Raketech and SolTech is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Raketech Group Holding 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 Raketech Group 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 Raketech Group Holding 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 Raketech Group i.e., Raketech Group and SolTech Energy go up and down completely randomly.
Pair Corralation between Raketech Group and SolTech Energy
Assuming the 90 days trading horizon Raketech Group Holding is expected to under-perform the SolTech Energy. In addition to that, Raketech Group is 1.54 times more volatile than SolTech Energy Sweden. It trades about -0.25 of its total potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.23 per unit of volatility. If you would invest 302.00 in SolTech Energy Sweden on September 1, 2024 and sell it today you would lose (68.00) from holding SolTech Energy Sweden or give up 22.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raketech Group Holding vs. SolTech Energy Sweden
Performance |
| Timeline |
| Raketech Group Holding |
| SolTech Energy Sweden |
Raketech Group and SolTech Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raketech Group and SolTech Energy
The main advantage of trading using opposite Raketech Group and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raketech Group 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.| Raketech Group vs. Adventure Box Technology | Raketech Group vs. Enorama Pharma AB | Raketech Group vs. KABE Group AB | Raketech Group vs. IAR Systems Group |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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