Correlation Between Scatec Solar and Eolus Vind
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Eolus Vind 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 Eolus Vind 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 Eolus Vind AB, you can compare the effects of market volatilities on Scatec Solar and Eolus Vind 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 Eolus Vind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Eolus Vind.
Diversification Opportunities for Scatec Solar and Eolus Vind
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scatec and Eolus is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Eolus Vind AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eolus Vind AB 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 Eolus Vind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eolus Vind AB has no effect on the direction of Scatec Solar i.e., Scatec Solar and Eolus Vind go up and down completely randomly.
Pair Corralation between Scatec Solar and Eolus Vind
Assuming the 90 days trading horizon Scatec Solar OL is expected to generate 1.13 times more return on investment than Eolus Vind. However, Scatec Solar is 1.13 times more volatile than Eolus Vind AB. It trades about 0.01 of its potential returns per unit of risk. Eolus Vind AB is currently generating about -0.05 per unit of risk. If you would invest 8,080 in Scatec Solar OL on August 28, 2024 and sell it today you would lose (115.00) from holding Scatec Solar OL or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scatec Solar OL vs. Eolus Vind AB
Performance |
| Timeline |
| Scatec Solar OL |
| Eolus Vind AB |
Scatec Solar and Eolus Vind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and Eolus Vind
The main advantage of trading using opposite Scatec Solar and Eolus Vind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, Eolus Vind 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 Eolus Vind will offset losses from the drop in Eolus Vind'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 |
| Eolus Vind vs. NOTE AB | Eolus Vind vs. Zaptec AS | Eolus Vind vs. SolTech Energy Sweden | Eolus Vind vs. Scatec Solar OL |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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