Correlation Between Scatec Solar and Kitron ASA
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Kitron ASA 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 Kitron ASA 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 Kitron ASA, you can compare the effects of market volatilities on Scatec Solar and Kitron ASA 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 Kitron ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Kitron ASA.
Diversification Opportunities for Scatec Solar and Kitron ASA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scatec and Kitron is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Kitron ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kitron ASA 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 Kitron ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kitron ASA has no effect on the direction of Scatec Solar i.e., Scatec Solar and Kitron ASA go up and down completely randomly.
Pair Corralation between Scatec Solar and Kitron ASA
Assuming the 90 days trading horizon Scatec Solar OL is expected to under-perform the Kitron ASA. But the stock apears to be less risky and, when comparing its historical volatility, Scatec Solar OL is 1.09 times less risky than Kitron ASA. The stock trades about -0.02 of its potential returns per unit of risk. The Kitron ASA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,340 in Kitron ASA on September 1, 2024 and sell it today you would lose (190.00) from holding Kitron ASA or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scatec Solar OL vs. Kitron ASA
Performance |
| Timeline |
| Scatec Solar OL |
| Kitron ASA |
Scatec Solar and Kitron ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and Kitron ASA
The main advantage of trading using opposite Scatec Solar and Kitron ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, Kitron ASA 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 Kitron ASA will offset losses from the drop in Kitron ASA's long position.| Scatec Solar vs. Hexagon Purus As | Scatec Solar vs. Zaptec AS | Scatec Solar vs. Nel ASA | Scatec Solar vs. Elkem ASA |
| Kitron ASA vs. Europris ASA | Kitron ASA vs. Kongsberg Gruppen ASA | Kitron ASA vs. Nordic Semiconductor ASA | Kitron ASA vs. Storebrand 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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