Correlation Between Soltec Power and Grenergy Renovables

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

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

Diversification Opportunities for Soltec Power and Grenergy Renovables

0.0

Correlation Coefficient

Soltec Power  Grenergy Renovables

Pay attention - limited upside

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

Pair Corralation between Soltec Power and Grenergy Renovables

If you would invest  3,220  in Grenergy Renovables SA on December 30, 2024 and sell it today you would earn a total of  810.00  from holding Grenergy Renovables SA or generate 25.16% return on investment over 90 days.

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

Soltec Power Holdings  vs.  Grenergy Renovables SA

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.

Grenergy Renovables

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grenergy Renovables SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Grenergy Renovables exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Soltec Power and Grenergy Renovables

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

The idea behind Soltec Power Holdings and Grenergy Renovables SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..