Correlation Between SpectraCure and Maha Energy
Can any of the company-specific risk be diversified away by investing in both SpectraCure and Maha 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 SpectraCure and Maha Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SpectraCure AB and Maha Energy AB, you can compare the effects of market volatilities on SpectraCure and Maha 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 SpectraCure with a short position of Maha Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpectraCure and Maha Energy.
Diversification Opportunities for SpectraCure and Maha Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SpectraCure and Maha is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SpectraCure AB and Maha Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Energy AB and SpectraCure 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 SpectraCure AB are associated (or correlated) with Maha Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Energy AB has no effect on the direction of SpectraCure i.e., SpectraCure and Maha Energy go up and down completely randomly.
Pair Corralation between SpectraCure and Maha Energy
Assuming the 90 days trading horizon SpectraCure AB is expected to generate 2.3 times more return on investment than Maha Energy. However, SpectraCure is 2.3 times more volatile than Maha Energy AB. It trades about -0.03 of its potential returns per unit of risk. Maha Energy AB is currently generating about -0.1 per unit of risk. If you would invest 261.00 in SpectraCure AB on August 28, 2024 and sell it today you would lose (92.00) from holding SpectraCure AB or give up 35.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SpectraCure AB vs. Maha Energy AB
Performance |
| Timeline |
| SpectraCure AB |
| Maha Energy AB |
SpectraCure and Maha Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SpectraCure and Maha Energy
The main advantage of trading using opposite SpectraCure and Maha Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpectraCure position performs unexpectedly, Maha 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 Maha Energy will offset losses from the drop in Maha Energy's long position.The idea behind SpectraCure AB and Maha Energy AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Maha Energy vs. SolTech Energy Sweden | Maha Energy vs. Minesto AB | Maha Energy vs. SaltX Technology Holding | Maha 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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