Correlation Between Scatec Solar and Integrated Wind

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

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

Diversification Opportunities for Scatec Solar and Integrated Wind

-0.16

Correlation Coefficient

Scatec Solar  Integrated Wind

Good diversification

The 3 months correlation between Scatec and Integrated is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Integrated Wind Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Wind Solutions and Scatec Solar 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 Scatec Solar OL are associated (or correlated) with Integrated Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Wind Solutions has no effect on the direction of Scatec Solar i.e., Scatec Solar and Integrated Wind go up and down completely randomly.

Pair Corralation between Scatec Solar and Integrated Wind

Assuming the 90 days trading horizon Scatec Solar OL is expected to generate 0.76 times more return on investment than Integrated Wind. However, Scatec Solar OL is 1.32 times less risky than Integrated Wind. It trades about 0.12 of its potential returns per unit of risk. Integrated Wind Solutions is currently generating about -0.06 per unit of risk. If you would invest  7,845  in Scatec Solar OL on June 29, 2024 and sell it today you would earn a total of  425.00  from holding Scatec Solar OL or generate 5.42% return on investment over 90 days.

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

Scatec Solar OL  vs.  Integrated Wind Solutions

Scatec Solar OL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scatec Solar OL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Scatec Solar is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Integrated Wind Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Wind Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Integrated Wind may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with Scatec Solar and Integrated Wind

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

The idea behind Scatec Solar OL and Integrated Wind Solutions 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.