Correlation Between SolTech Energy and Cortus Energy
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and Cortus 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 Cortus 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 Cortus Energy AB, you can compare the effects of market volatilities on SolTech Energy and Cortus 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 Cortus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Cortus Energy.
Diversification Opportunities for SolTech Energy and Cortus Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SolTech and Cortus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Cortus Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cortus Energy AB 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 Cortus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cortus Energy AB has no effect on the direction of SolTech Energy i.e., SolTech Energy and Cortus Energy go up and down completely randomly.
Pair Corralation between SolTech Energy and Cortus Energy
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the Cortus Energy. But the stock apears to be less risky and, when comparing its historical volatility, SolTech Energy Sweden is 1.48 times less risky than Cortus Energy. The stock trades about -0.23 of its potential returns per unit of risk. The Cortus Energy AB is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Cortus Energy AB on September 1, 2024 and sell it today you would lose (3.00) from holding Cortus Energy AB or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SolTech Energy Sweden vs. Cortus Energy AB
Performance |
| Timeline |
| SolTech Energy Sweden |
| Cortus Energy AB |
SolTech Energy and Cortus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and Cortus Energy
The main advantage of trading using opposite SolTech Energy and Cortus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Cortus 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 Cortus Energy will offset losses from the drop in Cortus 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 |
| Cortus Energy vs. SolTech Energy Sweden | Cortus Energy vs. Minesto AB | Cortus Energy vs. SaltX Technology Holding | Cortus Energy vs. Impact Coatings publ |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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