Correlation Between Aktia Bank and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Aktia Bank and Stora Enso 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 Aktia Bank and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aktia Bank Abp and Stora Enso Oyj, you can compare the effects of market volatilities on Aktia Bank and Stora Enso 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 Aktia Bank with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aktia Bank and Stora Enso.
Diversification Opportunities for Aktia Bank and Stora Enso
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aktia and Stora is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aktia Bank Abp and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Aktia Bank 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 Aktia Bank Abp are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Aktia Bank i.e., Aktia Bank and Stora Enso go up and down completely randomly.
Pair Corralation between Aktia Bank and Stora Enso
Assuming the 90 days trading horizon Aktia Bank Abp is expected to generate 0.3 times more return on investment than Stora Enso. However, Aktia Bank Abp is 3.36 times less risky than Stora Enso. It trades about -0.1 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.38 per unit of risk. If you would invest 927.00 in Aktia Bank Abp on September 4, 2024 and sell it today you would lose (9.00) from holding Aktia Bank Abp or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aktia Bank Abp vs. Stora Enso Oyj
Performance |
| Timeline |
| Aktia Bank Abp |
| Stora Enso Oyj |
Aktia Bank and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aktia Bank and Stora Enso
The main advantage of trading using opposite Aktia Bank and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aktia Bank position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Aktia Bank vs. Sampo Oyj A | Aktia Bank vs. Tokmanni Group Oyj | Aktia Bank vs. Nordea Bank Abp | Aktia Bank vs. TietoEVRY Corp |
| Stora Enso vs. Stora Enso Oyj | Stora Enso vs. Metsa Board Oyj | Stora Enso vs. UPM Kymmene Oyj | Stora Enso vs. Huhtamaki Oyj |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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