Correlation Between SolTech Energy and SpectraCure
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and SpectraCure 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 SpectraCure 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 SpectraCure AB, you can compare the effects of market volatilities on SolTech Energy and SpectraCure 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 SpectraCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and SpectraCure.
Diversification Opportunities for SolTech Energy and SpectraCure
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SolTech and SpectraCure is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and SpectraCure AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpectraCure 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 SpectraCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpectraCure AB has no effect on the direction of SolTech Energy i.e., SolTech Energy and SpectraCure go up and down completely randomly.
Pair Corralation between SolTech Energy and SpectraCure
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the SpectraCure. But the stock apears to be less risky and, when comparing its historical volatility, SolTech Energy Sweden is 1.61 times less risky than SpectraCure. The stock trades about -0.15 of its potential returns per unit of risk. The SpectraCure AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 258.00 in SpectraCure AB on September 3, 2024 and sell it today you would lose (113.00) from holding SpectraCure AB or give up 43.8% 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. SpectraCure AB
Performance |
| Timeline |
| SolTech Energy Sweden |
| SpectraCure AB |
SolTech Energy and SpectraCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolTech Energy and SpectraCure
The main advantage of trading using opposite SolTech Energy and SpectraCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, SpectraCure 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 SpectraCure will offset losses from the drop in SpectraCure'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 |
| SpectraCure vs. Maha Energy AB | SpectraCure vs. Saniona AB | SpectraCure vs. Kancera AB | SpectraCure 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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