Correlation Between ShaMaran Petroleum and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and SolTech Energy 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 ShaMaran Petroleum and SolTech Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ShaMaran Petroleum Corp and SolTech Energy Sweden, you can compare the effects of market volatilities on ShaMaran Petroleum and SolTech Energy 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 ShaMaran Petroleum with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and SolTech Energy.
Diversification Opportunities for ShaMaran Petroleum and SolTech Energy
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ShaMaran and SolTech is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and SolTech Energy Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolTech Energy Sweden and ShaMaran Petroleum 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 ShaMaran Petroleum Corp are associated (or correlated) with SolTech Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolTech Energy Sweden has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and SolTech Energy go up and down completely randomly.
Pair Corralation between ShaMaran Petroleum and SolTech Energy
Assuming the 90 days trading horizon ShaMaran Petroleum is expected to generate 2.71 times less return on investment than SolTech Energy. But when comparing it to its historical volatility, ShaMaran Petroleum Corp is 2.1 times less risky than SolTech Energy. It trades about 0.17 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 155.00 in SolTech Energy Sweden on October 25, 2024 and sell it today you would earn a total of 30.00 from holding SolTech Energy Sweden or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
ShaMaran Petroleum Corp vs. SolTech Energy Sweden
Performance |
| Timeline |
| ShaMaran Petroleum Corp |
| SolTech Energy Sweden |
ShaMaran Petroleum and SolTech Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ShaMaran Petroleum and SolTech Energy
The main advantage of trading using opposite ShaMaran Petroleum and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShaMaran Petroleum position performs unexpectedly, SolTech Energy 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 SolTech Energy will offset losses from the drop in SolTech Energy's long position.| ShaMaran Petroleum vs. Kinnevik Investment AB | ShaMaran Petroleum vs. OptiCept Technologies AB | ShaMaran Petroleum vs. Sdiptech AB | ShaMaran Petroleum vs. SolTech Energy Sweden |
| SolTech Energy vs. Eolus Vind AB | SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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