Correlation Between SolTech Energy and Alelion Energy
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and Alelion 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 SolTech Energy and Alelion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolTech Energy Sweden and Alelion Energy Systems, you can compare the effects of market volatilities on SolTech Energy and Alelion 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 SolTech Energy with a short position of Alelion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Alelion Energy.
Diversification Opportunities for SolTech Energy and Alelion Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SolTech and Alelion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Alelion Energy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alelion Energy Systems and SolTech Energy 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 SolTech Energy Sweden are associated (or correlated) with Alelion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alelion Energy Systems has no effect on the direction of SolTech Energy i.e., SolTech Energy and Alelion Energy go up and down completely randomly.
Pair Corralation between SolTech Energy and Alelion Energy
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to generate 0.75 times more return on investment than Alelion Energy. However, SolTech Energy Sweden is 1.33 times less risky than Alelion Energy. It trades about -0.06 of its potential returns per unit of risk. Alelion Energy Systems is currently generating about -0.07 per unit of risk. If you would invest 1,005 in SolTech Energy Sweden on September 1, 2024 and sell it today you would lose (771.00) from holding SolTech Energy Sweden or give up 76.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
SolTech Energy Sweden vs. Alelion Energy Systems
Performance |
| Timeline |
| SolTech Energy Sweden |
| Alelion Energy Systems |
SolTech Energy and Alelion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and Alelion Energy
The main advantage of trading using opposite SolTech Energy and Alelion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Alelion 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 Alelion Energy will offset losses from the drop in Alelion Energy's long position.| SolTech Energy vs. Eolus Vind AB | SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden |
| Alelion Energy vs. Arise Windpower AB | Alelion Energy vs. Impact Coatings publ | Alelion Energy vs. SolTech Energy Sweden | Alelion Energy vs. Crunchfish AB |
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 Correlations module to find global opportunities by holding instruments from different markets.
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