Correlation Between Solteq PLC and Digitalist Group

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

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

Diversification Opportunities for Solteq PLC and Digitalist Group

0.1

Correlation Coefficient

Solteq PLC  Digitalist Group

Average diversification

The 3 months correlation between Solteq and Digitalist is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Solteq PLC and Digitalist Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digitalist Group Oyj and Solteq PLC 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 Solteq PLC are associated (or correlated) with Digitalist Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digitalist Group Oyj has no effect on the direction of Solteq PLC i.e., Solteq PLC and Digitalist Group go up and down completely randomly.

Pair Corralation between Solteq PLC and Digitalist Group

Assuming the 90 days trading horizon Solteq PLC is expected to generate 0.53 times more return on investment than Digitalist Group. However, Solteq PLC is 1.9 times less risky than Digitalist Group. It trades about -0.04 of its potential returns per unit of risk. Digitalist Group Oyj is currently generating about -0.08 per unit of risk. If you would invest  63.00  in Solteq PLC on November 20, 2024 and sell it today you would lose (5.00) from holding Solteq PLC or give up 7.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Solteq PLC  vs.  Digitalist Group Oyj

Solteq PLC

Risk-Adjusted Performance

Very Weak

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

Digitalist Group Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digitalist Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Solteq PLC and Digitalist Group

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

The idea behind Solteq PLC and Digitalist Group Oyj 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..