Correlation Between Matas AS and Solar AS

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

By analyzing existing cross correlation between Matas AS and Solar AS, you can compare the effects of market volatilities on Matas AS and Solar AS 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 Matas AS with a short position of Solar AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Solar AS.

Diversification Opportunities for Matas AS and Solar AS

-0.33

Correlation Coefficient

Matas AS  Solar AS

Very good diversification

The 3 months correlation between Matas and Solar is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Solar AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar AS and Matas AS 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 Matas AS are associated (or correlated) with Solar AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar AS has no effect on the direction of Matas AS i.e., Matas AS and Solar AS go up and down completely randomly.

Pair Corralation between Matas AS and Solar AS

Assuming the 90 days trading horizon Matas AS is expected to generate 0.6 times more return on investment than Solar AS. However, Matas AS is 1.67 times less risky than Solar AS. It trades about 0.21 of its potential returns per unit of risk. Solar AS is currently generating about 0.04 per unit of risk. If you would invest  13,000  in Matas AS on October 5, 2024 and sell it today you would earn a total of  520.00  from holding Matas AS or generate 4.0% return on investment over 90 days.

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

Matas AS  vs.  Solar AS

Matas AS

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Matas AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating fundamental indicators, Matas AS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Solar AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solar AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Matas AS and Solar AS

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

The idea behind Matas AS and Solar AS 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 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.