Correlation Between Saule Technologies and APS Energia
Can any of the company-specific risk be diversified away by investing in both Saule Technologies and APS Energia 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 Saule Technologies and APS Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saule Technologies SA and APS Energia SA, you can compare the effects of market volatilities on Saule Technologies and APS Energia 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 Saule Technologies with a short position of APS Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saule Technologies and APS Energia.
Diversification Opportunities for Saule Technologies and APS Energia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saule and APS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Saule Technologies SA and APS Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Energia SA and Saule Technologies 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 Saule Technologies SA are associated (or correlated) with APS Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Energia SA has no effect on the direction of Saule Technologies i.e., Saule Technologies and APS Energia go up and down completely randomly.
Pair Corralation between Saule Technologies and APS Energia
Assuming the 90 days trading horizon Saule Technologies SA is expected to under-perform the APS Energia. In addition to that, Saule Technologies is 1.83 times more volatile than APS Energia SA. It trades about -0.02 of its total potential returns per unit of risk. APS Energia SA is currently generating about 0.21 per unit of volatility. If you would invest 232.00 in APS Energia SA on August 30, 2024 and sell it today you would earn a total of 38.00 from holding APS Energia SA or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saule Technologies SA vs. APS Energia SA
Performance |
| Timeline |
| Saule Technologies |
| APS Energia SA |
Saule Technologies and APS Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saule Technologies and APS Energia
The main advantage of trading using opposite Saule Technologies and APS Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saule Technologies position performs unexpectedly, APS Energia 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 APS Energia will offset losses from the drop in APS Energia's long position.| Saule Technologies vs. Clean Carbon Energy | Saule Technologies vs. ADX | Saule Technologies vs. Agroliga Group PLC | Saule Technologies vs. Vee SA |
| APS Energia vs. Asseco Business Solutions | APS Energia vs. Detalion Games SA | APS Energia vs. Asseco South Eastern | APS Energia vs. Vercom SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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