Correlation Between SolTech Energy and Embracer Group
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By analyzing existing cross correlation between SolTech Energy Sweden and Embracer Group AB, you can compare the effects of market volatilities on SolTech Energy and Embracer Group 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 Embracer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Embracer Group.
Diversification Opportunities for SolTech Energy and Embracer Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SolTech and Embracer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Embracer Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embracer Group 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 Embracer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embracer Group AB has no effect on the direction of SolTech Energy i.e., SolTech Energy and Embracer Group go up and down completely randomly.
Pair Corralation between SolTech Energy and Embracer Group
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the Embracer Group. In addition to that, SolTech Energy is 1.03 times more volatile than Embracer Group AB. It trades about -0.09 of its total potential returns per unit of risk. Embracer Group AB is currently generating about 0.03 per unit of volatility. If you would invest 2,501 in Embracer Group AB on August 31, 2024 and sell it today you would earn a total of 376.00 from holding Embracer Group AB or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolTech Energy Sweden vs. Embracer Group AB
Performance |
| Timeline |
| SolTech Energy Sweden |
| Embracer Group AB |
SolTech Energy and Embracer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and Embracer Group
The main advantage of trading using opposite SolTech Energy and Embracer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Embracer Group 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 Embracer Group will offset losses from the drop in Embracer Group'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 |
| Embracer Group vs. Evolution AB | Embracer Group vs. Sinch AB | Embracer Group vs. Samhllsbyggnadsbolaget i Norden | Embracer Group vs. Stillfront Group 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 Stocks Directory module to find actively traded stocks across global markets.
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