Correlation Between SolTech Energy and Saxlund Group
Can any of the company-specific risk be diversified away by investing in both SolTech Energy and Saxlund Group 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 Saxlund Group 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 Saxlund Group AB, you can compare the effects of market volatilities on SolTech Energy and Saxlund Group 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 Saxlund Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolTech Energy and Saxlund Group.
Diversification Opportunities for SolTech Energy and Saxlund Group
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SolTech and Saxlund is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SolTech Energy Sweden and Saxlund Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saxlund Group 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 Saxlund Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saxlund Group AB has no effect on the direction of SolTech Energy i.e., SolTech Energy and Saxlund Group go up and down completely randomly.
Pair Corralation between SolTech Energy and Saxlund Group
Assuming the 90 days trading horizon SolTech Energy Sweden is expected to under-perform the Saxlund Group. But the stock apears to be less risky and, when comparing its historical volatility, SolTech Energy Sweden is 1.48 times less risky than Saxlund Group. The stock trades about -0.14 of its potential returns per unit of risk. The Saxlund Group AB is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Saxlund Group AB on September 15, 2024 and sell it today you would lose (243.00) from holding Saxlund Group AB or give up 22.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SolTech Energy Sweden vs. Saxlund Group AB
Performance |
Timeline |
SolTech Energy Sweden |
Saxlund Group AB |
SolTech Energy and Saxlund Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SolTech Energy and Saxlund Group
The main advantage of trading using opposite SolTech Energy and Saxlund Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolTech Energy position performs unexpectedly, Saxlund Group 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 Saxlund Group will offset losses from the drop in Saxlund Group's long position.SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden | SolTech Energy vs. KABE Group AB |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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