Correlation Between Invisio Communications and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both Invisio Communications 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 Invisio Communications and SolTech Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and SolTech Energy Sweden, you can compare the effects of market volatilities on Invisio Communications 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 Invisio Communications with a short position of SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and SolTech Energy.
Diversification Opportunities for Invisio Communications and SolTech Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invisio and SolTech is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications 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 Invisio Communications 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 Invisio Communications 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 Invisio Communications i.e., Invisio Communications and SolTech Energy go up and down completely randomly.
Pair Corralation between Invisio Communications and SolTech Energy
Assuming the 90 days trading horizon Invisio Communications AB is expected to generate 0.67 times more return on investment than SolTech Energy. However, Invisio Communications AB is 1.49 times less risky than SolTech Energy. It trades about -0.08 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.15 per unit of risk. If you would invest 37,466 in Invisio Communications AB on April 25, 2025 and sell it today you would lose (5,016) from holding Invisio Communications AB or give up 13.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Invisio Communications AB vs. SolTech Energy Sweden
Performance |
Timeline |
Invisio Communications |
SolTech Energy Sweden |
Invisio Communications and SolTech Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invisio Communications and SolTech Energy
The main advantage of trading using opposite Invisio Communications and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications 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.Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra AB |
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Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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