Correlation Between Sacyr SA and Solaria Energa

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

By analyzing existing cross correlation between Sacyr SA and Solaria Energa y, you can compare the effects of market volatilities on Sacyr SA and Solaria Energa 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 Solaria Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sacyr SA and Solaria Energa.

Diversification Opportunities for Sacyr SA and Solaria Energa

0.6

Correlation Coefficient

Sacyr SA  Solaria Energa

Poor diversification

The 3 months correlation between Sacyr and Solaria is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sacyr SA and Solaria Energa y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaria Energa y 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 Solaria Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaria Energa y has no effect on the direction of Sacyr SA i.e., Sacyr SA and Solaria Energa go up and down completely randomly.

Pair Corralation between Sacyr SA and Solaria Energa

Assuming the 90 days trading horizon Sacyr SA is expected to generate 2.03 times less return on investment than Solaria Energa. But when comparing it to its historical volatility, Sacyr SA is 1.76 times less risky than Solaria Energa. It trades about 0.19 of its potential returns per unit of risk. Solaria Energa y is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  984.00  in Solaria Energa y on April 22, 2025 and sell it today you would earn a total of  77.00  from holding Solaria Energa y or generate 7.83% 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.  Solaria Energa y

Sacyr SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sacyr SA are ranked lower than 17 (%) 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.

Solaria Energa y

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Solaria Energa y are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Solaria Energa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sacyr SA and Solaria Energa

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

The idea behind Sacyr SA and Solaria Energa y 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.