Correlation Between Amadeus IT and Soltec Power

Can any of the company-specific risk be diversified away by investing in both Amadeus IT and Soltec Power 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 Amadeus IT and Soltec Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amadeus IT Group and Soltec Power Holdings, you can compare the effects of market volatilities on Amadeus IT and Soltec Power 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 Amadeus IT with a short position of Soltec Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Soltec Power.

Diversification Opportunities for Amadeus IT and Soltec Power

0.0

Correlation Coefficient

Amadeus IT  Soltec Power

Pay attention - limited upside

The 3 months correlation between Amadeus and Soltec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and Soltec Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soltec Power Holdings and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with Soltec Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soltec Power Holdings has no effect on the direction of Amadeus IT i.e., Amadeus IT and Soltec Power go up and down completely randomly.

Pair Corralation between Amadeus IT and Soltec Power

If you would invest  6,841  in Amadeus IT Group on December 3, 2024 and sell it today you would earn a total of  647.00  from holding Amadeus IT Group or generate 9.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amadeus IT Group  vs.  Soltec Power Holdings

Amadeus IT Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amadeus IT Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Amadeus IT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Soltec Power Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Soltec Power Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Soltec Power is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amadeus IT and Soltec Power

The main advantage of trading using opposite Amadeus IT and Soltec Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, Soltec Power 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 Soltec Power will offset losses from the drop in Soltec Power's long position.

The idea behind Amadeus IT Group and Soltec Power Holdings 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.