Correlation Between Tomra Systems and Scatec Solar
Can any of the company-specific risk be diversified away by investing in both Tomra Systems and Scatec Solar 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 Tomra Systems and Scatec Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tomra Systems ASA and Scatec Solar OL, you can compare the effects of market volatilities on Tomra Systems and Scatec Solar 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 Tomra Systems with a short position of Scatec Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tomra Systems and Scatec Solar.
Diversification Opportunities for Tomra Systems and Scatec Solar
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tomra and Scatec is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tomra Systems ASA and Scatec Solar OL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scatec Solar OL and Tomra Systems 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 Tomra Systems ASA are associated (or correlated) with Scatec Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scatec Solar OL has no effect on the direction of Tomra Systems i.e., Tomra Systems and Scatec Solar go up and down completely randomly.
Pair Corralation between Tomra Systems and Scatec Solar
Assuming the 90 days trading horizon Tomra Systems ASA is expected to generate 1.11 times more return on investment than Scatec Solar. However, Tomra Systems is 1.11 times more volatile than Scatec Solar OL. It trades about 0.03 of its potential returns per unit of risk. Scatec Solar OL is currently generating about 0.0 per unit of risk. If you would invest 15,900 in Tomra Systems ASA on November 3, 2024 and sell it today you would earn a total of 870.00 from holding Tomra Systems ASA or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tomra Systems ASA vs. Scatec Solar OL
Performance |
| Timeline |
| Tomra Systems ASA |
| Scatec Solar OL |
Tomra Systems and Scatec Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tomra Systems and Scatec Solar
The main advantage of trading using opposite Tomra Systems and Scatec Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tomra Systems position performs unexpectedly, Scatec Solar 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 Scatec Solar will offset losses from the drop in Scatec Solar's long position.| Tomra Systems vs. Orkla ASA | Tomra Systems vs. Telenor ASA | Tomra Systems vs. Yara International ASA | Tomra Systems vs. SalMar ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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