Correlation Between SolTech Energy and Kollect On
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and Kollect On 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 Kollect On 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 Kollect on Demand, you can compare the effects of market volatilities on SolTech Energy and Kollect On 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 Kollect On. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Kollect On.
Diversification Opportunities for SolTech Energy and Kollect On
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SolTech and Kollect is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Kollect on Demand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kollect on Demand 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 Kollect On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kollect on Demand has no effect on the direction of SolTech Energy i.e., SolTech Energy and Kollect On go up and down completely randomly.
Pair Corralation between SolTech Energy and Kollect On
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the Kollect On. In addition to that, SolTech Energy is 1.04 times more volatile than Kollect on Demand. It trades about -0.13 of its total potential returns per unit of risk. Kollect on Demand is currently generating about -0.12 per unit of volatility. If you would invest 260.00 in Kollect on Demand on November 6, 2024 and sell it today you would lose (18.00) from holding Kollect on Demand or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolTech Energy Sweden vs. Kollect on Demand
Performance |
| Timeline |
| SolTech Energy Sweden |
| Kollect on Demand |
SolTech Energy and Kollect On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and Kollect On
The main advantage of trading using opposite SolTech Energy and Kollect On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Kollect On 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 Kollect On will offset losses from the drop in Kollect On's long position.| SolTech Energy vs. Midsummer AB | SolTech Energy vs. Mekonomen AB | SolTech Energy vs. Embellence Group AB | SolTech Energy vs. AAC Clyde Space |
| Kollect On vs. Spectrumone publ AB | Kollect On vs. Kancera AB | Kollect On vs. Cortus Energy AB | Kollect On vs. SolTech Energy 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 Stocks Directory module to find actively traded stocks across global markets.
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