Correlation Between Scatec Solar and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Ocean Sun 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 Ocean Sun 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 Ocean Sun As, you can compare the effects of market volatilities on Scatec Solar and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Ocean Sun.
Diversification Opportunities for Scatec Solar and Ocean Sun
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scatec and Ocean is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Scatec Solar i.e., Scatec Solar and Ocean Sun go up and down completely randomly.
Pair Corralation between Scatec Solar and Ocean Sun
Assuming the 90 days trading horizon Scatec Solar OL is expected to generate 0.37 times more return on investment than Ocean Sun. However, Scatec Solar OL is 2.72 times less risky than Ocean Sun. It trades about -0.02 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.05 per unit of risk. If you would invest 8,640 in Scatec Solar OL on September 1, 2024 and sell it today you would lose (580.00) from holding Scatec Solar OL or give up 6.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Scatec Solar OL vs. Ocean Sun As
Performance |
| Timeline |
| Scatec Solar OL |
| Ocean Sun As |
Scatec Solar and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and Ocean Sun
The main advantage of trading using opposite Scatec Solar and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun's long position.| Scatec Solar vs. Hexagon Purus As | Scatec Solar vs. Zaptec AS | Scatec Solar vs. Nel ASA | Scatec Solar vs. Elkem 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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