Correlation Between SSH Communications and Solteq PLC
Can any of the company-specific risk be diversified away by investing in both SSH Communications and Solteq PLC 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 SSH Communications and Solteq PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSH Communications Security and Solteq PLC, you can compare the effects of market volatilities on SSH Communications and Solteq PLC 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 SSH Communications with a short position of Solteq PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Solteq PLC.
Diversification Opportunities for SSH Communications and Solteq PLC
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SSH and Solteq is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Solteq PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solteq PLC and SSH Communications 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 SSH Communications Security are associated (or correlated) with Solteq PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solteq PLC has no effect on the direction of SSH Communications i.e., SSH Communications and Solteq PLC go up and down completely randomly.
Pair Corralation between SSH Communications and Solteq PLC
Assuming the 90 days trading horizon SSH Communications Security is expected to generate 0.97 times more return on investment than Solteq PLC. However, SSH Communications Security is 1.04 times less risky than Solteq PLC. It trades about -0.02 of its potential returns per unit of risk. Solteq PLC is currently generating about -0.04 per unit of risk. If you would invest 175.00 in SSH Communications Security on August 28, 2024 and sell it today you would lose (70.00) from holding SSH Communications Security or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. Solteq PLC
Performance |
| Timeline |
| SSH Communications |
| Solteq PLC |
SSH Communications and Solteq PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and Solteq PLC
The main advantage of trading using opposite SSH Communications and Solteq PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications position performs unexpectedly, Solteq PLC 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 Solteq PLC will offset losses from the drop in Solteq PLC's long position.| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia Oyj |
| Solteq PLC vs. CapMan Oyj B | Solteq PLC vs. HKFoods Oyj A | Solteq PLC vs. KONE Oyj | Solteq PLC vs. Exel Composites Oyj |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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