Correlation Between SolTech Energy and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and Powercell Sweden 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 Powercell Sweden 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 Powercell Sweden, you can compare the effects of market volatilities on SolTech Energy and Powercell Sweden 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 Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Powercell Sweden.
Diversification Opportunities for SolTech Energy and Powercell Sweden
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between SolTech and Powercell is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden 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 Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of SolTech Energy i.e., SolTech Energy and Powercell Sweden go up and down completely randomly.
Pair Corralation between SolTech Energy and Powercell Sweden
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the Powercell Sweden. But the stock apears to be less risky and, when comparing its historical volatility, SolTech Energy Sweden is 1.25 times less risky than Powercell Sweden. The stock trades about -0.15 of its potential returns per unit of risk. The Powercell Sweden is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,030 in Powercell Sweden on August 29, 2024 and sell it today you would lose (450.00) from holding Powercell Sweden or give up 11.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolTech Energy Sweden vs. Powercell Sweden
Performance |
| Timeline |
| SolTech Energy Sweden |
| Powercell Sweden |
SolTech Energy and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and Powercell Sweden
The main advantage of trading using opposite SolTech Energy and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden'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 |
| Powercell Sweden vs. Hexatronic Group AB | Powercell Sweden vs. Instalco Intressenter AB | Powercell Sweden vs. NOTE AB | Powercell Sweden vs. Dometic 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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