Correlation Between Omeros and UPM Kymmene
Can any of the company-specific risk be diversified away by investing in both Omeros and UPM Kymmene 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 Omeros and UPM Kymmene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omeros and UPM Kymmene Oyj, you can compare the effects of market volatilities on Omeros and UPM Kymmene 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 Omeros with a short position of UPM Kymmene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omeros and UPM Kymmene.
Diversification Opportunities for Omeros and UPM Kymmene
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Omeros and UPM is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Omeros and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene Oyj and Omeros 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 Omeros are associated (or correlated) with UPM Kymmene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of Omeros i.e., Omeros and UPM Kymmene go up and down completely randomly.
Pair Corralation between Omeros and UPM Kymmene
Assuming the 90 days horizon Omeros is expected to generate 14.47 times more return on investment than UPM Kymmene. However, Omeros is 14.47 times more volatile than UPM Kymmene Oyj. It trades about 0.36 of its potential returns per unit of risk. UPM Kymmene Oyj is currently generating about -0.35 per unit of risk. If you would invest 385.00 in Omeros on August 31, 2024 and sell it today you would earn a total of 730.00 from holding Omeros or generate 189.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omeros vs. UPM Kymmene Oyj
Performance |
| Timeline |
| Omeros |
| UPM Kymmene Oyj |
Omeros and UPM Kymmene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omeros and UPM Kymmene
The main advantage of trading using opposite Omeros and UPM Kymmene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omeros position performs unexpectedly, UPM Kymmene 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 UPM Kymmene will offset losses from the drop in UPM Kymmene's long position.| Omeros vs. VIRGIN WINES UK | Omeros vs. MI Homes | Omeros vs. CENTURIA OFFICE REIT | Omeros vs. Addus HomeCare |
| UPM Kymmene vs. Suzano SA | UPM Kymmene vs. Suzano SA | UPM Kymmene vs. Holmen AB | UPM Kymmene vs. Nine Dragons Paper |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |