Correlation Between Scana ASA and SoftOx Solutions
Can any of the company-specific risk be diversified away by investing in both Scana ASA and SoftOx Solutions 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 Scana ASA and SoftOx Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scana ASA and SoftOx Solutions AS, you can compare the effects of market volatilities on Scana ASA and SoftOx Solutions 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 Scana ASA with a short position of SoftOx Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scana ASA and SoftOx Solutions.
Diversification Opportunities for Scana ASA and SoftOx Solutions
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scana and SoftOx is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Scana ASA and SoftOx Solutions AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftOx Solutions and Scana ASA 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 Scana ASA are associated (or correlated) with SoftOx Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftOx Solutions has no effect on the direction of Scana ASA i.e., Scana ASA and SoftOx Solutions go up and down completely randomly.
Pair Corralation between Scana ASA and SoftOx Solutions
Assuming the 90 days trading horizon Scana ASA is expected to generate 0.26 times more return on investment than SoftOx Solutions. However, Scana ASA is 3.87 times less risky than SoftOx Solutions. It trades about 0.05 of its potential returns per unit of risk. SoftOx Solutions AS is currently generating about -0.11 per unit of risk. If you would invest 191.00 in Scana ASA on August 31, 2024 and sell it today you would earn a total of 92.00 from holding Scana ASA or generate 48.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scana ASA vs. SoftOx Solutions AS
Performance |
| Timeline |
| Scana ASA |
| SoftOx Solutions |
Scana ASA and SoftOx Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scana ASA and SoftOx Solutions
The main advantage of trading using opposite Scana ASA and SoftOx Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scana ASA position performs unexpectedly, SoftOx Solutions 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 SoftOx Solutions will offset losses from the drop in SoftOx Solutions' long position.| Scana ASA vs. Magnora ASA | Scana ASA vs. Solstad Offsho | Scana ASA vs. REC Silicon ASA | Scana ASA vs. Endur ASA |
| SoftOx Solutions vs. Carasent ASA | SoftOx Solutions vs. Bergenbio ASA | SoftOx Solutions vs. Photocure | SoftOx Solutions vs. Kitron ASA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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