Correlation Between Scatec Solar and Bonheur
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Bonheur 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 Scatec Solar and Bonheur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scatec Solar OL and Bonheur, you can compare the effects of market volatilities on Scatec Solar and Bonheur 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 Scatec Solar with a short position of Bonheur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Bonheur.
Diversification Opportunities for Scatec Solar and Bonheur
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scatec and Bonheur is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Scatec Solar 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 Scatec Solar OL are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Scatec Solar i.e., Scatec Solar and Bonheur go up and down completely randomly.
Pair Corralation between Scatec Solar and Bonheur
Assuming the 90 days trading horizon Scatec Solar OL is expected to under-perform the Bonheur. In addition to that, Scatec Solar is 1.4 times more volatile than Bonheur. It trades about -0.09 of its total potential returns per unit of risk. Bonheur is currently generating about -0.13 per unit of volatility. If you would invest 27,750 in Bonheur on August 29, 2024 and sell it today you would lose (1,200) from holding Bonheur or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scatec Solar OL vs. Bonheur
Performance |
| Timeline |
| Scatec Solar OL |
| Bonheur |
Scatec Solar and Bonheur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and Bonheur
The main advantage of trading using opposite Scatec Solar and Bonheur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, Bonheur 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 Bonheur will offset losses from the drop in Bonheur's long position.| Scatec Solar vs. Aker Carbon Capture | Scatec Solar vs. Elkem ASA | Scatec Solar vs. Vow ASA | Scatec Solar vs. North Energy ASA |
| Bonheur vs. Cloudberry Clean Energy | Bonheur vs. Aker ASA | Bonheur vs. Scatec Solar OL | Bonheur vs. Borregaard 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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