Correlation Between Scatec Solar and Eolus Vind

Can any of the company-specific risk be diversified away by investing in both Scatec Solar and Eolus Vind 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 Eolus Vind 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 Eolus Vind AB, you can compare the effects of market volatilities on Scatec Solar and Eolus Vind 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 Eolus Vind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scatec Solar and Eolus Vind.

Diversification Opportunities for Scatec Solar and Eolus Vind

0.8

Correlation Coefficient

Scatec Solar  Eolus Vind

Very poor diversification

The 3 months correlation between Scatec and Eolus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Scatec Solar OL and Eolus Vind AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eolus Vind AB 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 Eolus Vind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eolus Vind AB has no effect on the direction of Scatec Solar i.e., Scatec Solar and Eolus Vind go up and down completely randomly.

Pair Corralation between Scatec Solar and Eolus Vind

Assuming the 90 days trading horizon Scatec Solar OL is expected to generate 0.46 times more return on investment than Eolus Vind. However, Scatec Solar OL is 2.16 times less risky than Eolus Vind. It trades about 0.36 of its potential returns per unit of risk. Eolus Vind AB is currently generating about 0.09 per unit of risk. If you would invest  7,855  in Scatec Solar OL on April 24, 2025 and sell it today you would earn a total of  2,605  from holding Scatec Solar OL or generate 33.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Scatec Solar OL  vs.  Eolus Vind AB

Scatec Solar OL

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Scatec Solar OL are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Scatec Solar displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Scatec Solar and Eolus Vind

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

The idea behind Scatec Solar OL and Eolus Vind AB 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.