Correlation Between Scatec Solar and SpareBank
Can any of the company-specific risk be diversified away by investing in both Scatec Solar and SpareBank 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 SpareBank 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 SpareBank 1 stlandet, you can compare the effects of market volatilities on Scatec Solar and SpareBank 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 SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and SpareBank.
Diversification Opportunities for Scatec Solar and SpareBank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scatec and SpareBank is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and SpareBank 1 stlandet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 stlandet 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 SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 stlandet has no effect on the direction of Scatec Solar i.e., Scatec Solar and SpareBank go up and down completely randomly.
Pair Corralation between Scatec Solar and SpareBank
Assuming the 90 days trading horizon Scatec Solar is expected to generate 2.61 times less return on investment than SpareBank. In addition to that, Scatec Solar is 1.41 times more volatile than SpareBank 1 stlandet. It trades about 0.02 of its total potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.06 per unit of volatility. If you would invest 14,448 in SpareBank 1 stlandet on September 13, 2024 and sell it today you would earn a total of 468.00 from holding SpareBank 1 stlandet or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scatec Solar OL vs. SpareBank 1 stlandet
Performance |
| Timeline |
| Scatec Solar OL |
| SpareBank 1 stlandet |
Scatec Solar and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scatec Solar and SpareBank
The main advantage of trading using opposite Scatec Solar and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scatec Solar position performs unexpectedly, SpareBank 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 SpareBank will offset losses from the drop in SpareBank's long position.| Scatec Solar vs. Bonheur | Scatec Solar vs. Kongsberg Gruppen ASA | Scatec Solar vs. Napatech AS | Scatec Solar vs. Elkem ASA |
| SpareBank vs. Kongsberg Gruppen ASA | SpareBank vs. Napatech AS | SpareBank vs. Elkem ASA | SpareBank 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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