Correlation Between ALK Abell and Soluna Holdings

Can any of the company-specific risk be diversified away by investing in both ALK Abell and Soluna Holdings 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 ALK Abell and Soluna Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALK Abell AS and Soluna Holdings Preferred, you can compare the effects of market volatilities on ALK Abell and Soluna Holdings 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 ALK Abell with a short position of Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALK Abell and Soluna Holdings.

Diversification Opportunities for ALK Abell and Soluna Holdings

-0.06

Correlation Coefficient

ALK Abell  Soluna Holdings

Good diversification

The 3 months correlation between ALK and Soluna is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ALK Abell AS and Soluna Holdings Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings Preferred and ALK Abell 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 ALK Abell AS are associated (or correlated) with Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings Preferred has no effect on the direction of ALK Abell i.e., ALK Abell and Soluna Holdings go up and down completely randomly.

Pair Corralation between ALK Abell and Soluna Holdings

Assuming the 90 days trading horizon ALK Abell AS is expected to generate 0.11 times more return on investment than Soluna Holdings. However, ALK Abell AS is 9.43 times less risky than Soluna Holdings. It trades about 0.24 of its potential returns per unit of risk. Soluna Holdings Preferred is currently generating about 0.02 per unit of risk. If you would invest  16,100  in ALK Abell AS on May 7, 2025 and sell it today you would earn a total of  2,590  from holding ALK Abell AS or generate 16.09% return on investment over 90 days.

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

ALK Abell AS  vs.  Soluna Holdings Preferred

ALK Abell AS

Risk-Adjusted Performance

Solid

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

Soluna Holdings Preferred

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Soluna Holdings Preferred are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical indicators, Soluna Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ALK Abell and Soluna Holdings

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

The idea behind ALK Abell AS and Soluna Holdings Preferred 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.