Correlation Between Sacyr SA and Energy Solar

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

By analyzing existing cross correlation between Sacyr SA and Energy Solar Tech, you can compare the effects of market volatilities on Sacyr SA and Energy Solar 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 Sacyr SA with a short position of Energy Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sacyr SA and Energy Solar.

Diversification Opportunities for Sacyr SA and Energy Solar

0.62

Correlation Coefficient

Sacyr SA  Energy Solar

Poor diversification

The 3 months correlation between Sacyr and Energy is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sacyr SA and Energy Solar Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Solar Tech and Sacyr SA 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 Sacyr SA are associated (or correlated) with Energy Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Solar Tech has no effect on the direction of Sacyr SA i.e., Sacyr SA and Energy Solar go up and down completely randomly.

Pair Corralation between Sacyr SA and Energy Solar

Assuming the 90 days trading horizon Sacyr SA is expected to generate 1.49 times less return on investment than Energy Solar. But when comparing it to its historical volatility, Sacyr SA is 4.29 times less risky than Energy Solar. It trades about 0.24 of its potential returns per unit of risk. Energy Solar Tech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  226.00  in Energy Solar Tech on April 22, 2025 and sell it today you would earn a total of  44.00  from holding Energy Solar Tech or generate 19.47% return on investment over 90 days.

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

Sacyr SA  vs.  Energy Solar Tech

Sacyr SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sacyr SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sacyr SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Energy Solar Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Solar Tech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Energy Solar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sacyr SA and Energy Solar

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

The idea behind Sacyr SA and Energy Solar Tech 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.