Correlation Between SaltX Technology and Peab AB

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

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

Diversification Opportunities for SaltX Technology and Peab AB

0.25

Correlation Coefficient

SaltX Technology  Peab AB

Modest diversification

The 3 months correlation between SaltX and Peab is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SaltX Technology Holding and Peab AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peab AB and SaltX Technology 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 SaltX Technology Holding are associated (or correlated) with Peab AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peab AB has no effect on the direction of SaltX Technology i.e., SaltX Technology and Peab AB go up and down completely randomly.

Pair Corralation between SaltX Technology and Peab AB

Assuming the 90 days trading horizon SaltX Technology Holding is expected to generate 3.72 times more return on investment than Peab AB. However, SaltX Technology is 3.72 times more volatile than Peab AB. It trades about 0.1 of its potential returns per unit of risk. Peab AB is currently generating about -0.11 per unit of risk. If you would invest  313.00  in SaltX Technology Holding on September 15, 2024 and sell it today you would earn a total of  28.00  from holding SaltX Technology Holding or generate 8.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SaltX Technology Holding  vs.  Peab AB

SaltX Technology Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SaltX Technology Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, SaltX Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Peab AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Peab AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Peab AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SaltX Technology and Peab AB

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

The idea behind SaltX Technology Holding and Peab AB 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.