Correlation Between Eolus Vind and SolTech Energy

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

By analyzing existing cross correlation between Eolus Vind AB and SolTech Energy Sweden, you can compare the effects of market volatilities on Eolus Vind and SolTech Energy 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 Eolus Vind with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and SolTech Energy.

Diversification Opportunities for Eolus Vind and SolTech Energy

-0.72

Correlation Coefficient

Eolus Vind  SolTech Energy

Pay attention - limited upside

The 3 months correlation between Eolus and SolTech is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind AB and SolTech Energy Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolTech Energy Sweden and Eolus Vind 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 Eolus Vind AB are associated (or correlated) with SolTech Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolTech Energy Sweden has no effect on the direction of Eolus Vind i.e., Eolus Vind and SolTech Energy go up and down completely randomly.

Pair Corralation between Eolus Vind and SolTech Energy

Assuming the 90 days trading horizon Eolus Vind AB is expected to generate 0.75 times more return on investment than SolTech Energy. However, Eolus Vind AB is 1.33 times less risky than SolTech Energy. It trades about 0.09 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.12 per unit of risk. If you would invest  4,817  in Eolus Vind AB on April 23, 2025 and sell it today you would earn a total of  693.00  from holding Eolus Vind AB or generate 14.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Eolus Vind AB  vs.  SolTech Energy Sweden

Eolus Vind AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eolus Vind AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Eolus Vind sustained solid returns over the last few months and may actually be approaching a breakup point.

SolTech Energy Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days SolTech Energy Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eolus Vind and SolTech Energy

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

The idea behind Eolus Vind AB and SolTech Energy Sweden 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.