Correlation Between SIDETRADE and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both SIDETRADE and Neste Oyj 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 SIDETRADE and Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIDETRADE EO 1 and Neste Oyj, you can compare the effects of market volatilities on SIDETRADE and Neste Oyj 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 SIDETRADE with a short position of Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and Neste Oyj.
Diversification Opportunities for SIDETRADE and Neste Oyj
Good diversification
The 3 months correlation between SIDETRADE and Neste is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj and SIDETRADE 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 SIDETRADE EO 1 are associated (or correlated) with Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of SIDETRADE i.e., SIDETRADE and Neste Oyj go up and down completely randomly.
Pair Corralation between SIDETRADE and Neste Oyj
Assuming the 90 days horizon SIDETRADE EO 1 is expected to generate 0.86 times more return on investment than Neste Oyj. However, SIDETRADE EO 1 is 1.16 times less risky than Neste Oyj. It trades about 0.05 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.09 per unit of risk. If you would invest 14,900 in SIDETRADE EO 1 on September 21, 2024 and sell it today you would earn a total of 6,800 from holding SIDETRADE EO 1 or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SIDETRADE EO 1 vs. Neste Oyj
Performance |
| Timeline |
| SIDETRADE EO 1 |
| Neste Oyj |
SIDETRADE and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIDETRADE and Neste Oyj
The main advantage of trading using opposite SIDETRADE and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| SIDETRADE vs. Superior Plus Corp | SIDETRADE vs. SIVERS SEMICONDUCTORS AB | SIDETRADE vs. Norsk Hydro ASA | SIDETRADE vs. Reliance Steel Aluminum |
| Neste Oyj vs. The Trade Desk | Neste Oyj vs. Marie Brizard Wine | Neste Oyj vs. SOGECLAIR SA INH | Neste Oyj vs. SIDETRADE EO 1 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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