Correlation Between Scatec Solar and Otovo AS
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Otovo AS 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 Otovo AS 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 Otovo AS, you can compare the effects of market volatilities on Scatec Solar and Otovo AS 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 Otovo AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Otovo AS.
Diversification Opportunities for Scatec Solar and Otovo AS
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scatec and Otovo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Otovo AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otovo 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 Otovo AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otovo AS has no effect on the direction of Scatec Solar i.e., Scatec Solar and Otovo AS go up and down completely randomly.
Pair Corralation between Scatec Solar and Otovo AS
Assuming the 90 days trading horizon Scatec Solar OL is expected to generate 0.3 times more return on investment than Otovo AS. However, Scatec Solar OL is 3.3 times less risky than Otovo AS. It trades about -0.02 of its potential returns per unit of risk. Otovo AS is currently generating about -0.03 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 | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Scatec Solar OL vs. Otovo AS
Performance |
| Timeline |
| Scatec Solar OL |
| Otovo AS |
Scatec Solar and Otovo AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and Otovo AS
The main advantage of trading using opposite Scatec Solar and Otovo AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, Otovo AS 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 Otovo AS will offset losses from the drop in Otovo AS'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |