Correlation Between Fiskars Oyj and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Fiskars Oyj and Strategic Investments 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 Fiskars Oyj and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiskars Oyj Abp and Strategic Investments AS, you can compare the effects of market volatilities on Fiskars Oyj and Strategic Investments 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 Fiskars Oyj with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiskars Oyj and Strategic Investments.
Diversification Opportunities for Fiskars Oyj and Strategic Investments
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiskars and Strategic is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fiskars Oyj Abp and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Fiskars Oyj 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 Fiskars Oyj Abp are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Fiskars Oyj i.e., Fiskars Oyj and Strategic Investments go up and down completely randomly.
Pair Corralation between Fiskars Oyj and Strategic Investments
Assuming the 90 days horizon Fiskars Oyj Abp is expected to generate 0.44 times more return on investment than Strategic Investments. However, Fiskars Oyj Abp is 2.29 times less risky than Strategic Investments. It trades about -0.25 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.2 per unit of risk. If you would invest 1,520 in Fiskars Oyj Abp on September 14, 2024 and sell it today you would lose (114.00) from holding Fiskars Oyj Abp or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiskars Oyj Abp vs. Strategic Investments AS
Performance |
| Timeline |
| Fiskars Oyj Abp |
| Strategic Investments |
Fiskars Oyj and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiskars Oyj and Strategic Investments
The main advantage of trading using opposite Fiskars Oyj and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiskars Oyj position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Fiskars Oyj vs. Strategic Investments AS | Fiskars Oyj vs. AAC TECHNOLOGHLDGADR | Fiskars Oyj vs. PKSHA TECHNOLOGY INC | Fiskars Oyj vs. NetSol Technologies |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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