Correlation Between New Perspective and Elisa Oyj
Can any of the company-specific risk be diversified away by investing in both New Perspective and Elisa 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 New Perspective and Elisa Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Elisa Oyj, you can compare the effects of market volatilities on New Perspective and Elisa 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 New Perspective with a short position of Elisa Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Elisa Oyj.
Diversification Opportunities for New Perspective and Elisa Oyj
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Elisa is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Elisa Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elisa Oyj and New Perspective 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 New Perspective Fund are associated (or correlated) with Elisa Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elisa Oyj has no effect on the direction of New Perspective i.e., New Perspective and Elisa Oyj go up and down completely randomly.
Pair Corralation between New Perspective and Elisa Oyj
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.54 times more return on investment than Elisa Oyj. However, New Perspective Fund is 1.84 times less risky than Elisa Oyj. It trades about 0.26 of its potential returns per unit of risk. Elisa Oyj is currently generating about -0.05 per unit of risk. If you would invest 6,202 in New Perspective Fund on November 3, 2024 and sell it today you would earn a total of 280.00 from holding New Perspective Fund or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
New Perspective Fund vs. Elisa Oyj
Performance |
| Timeline |
| New Perspective |
| Elisa Oyj |
New Perspective and Elisa Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Elisa Oyj
The main advantage of trading using opposite New Perspective and Elisa Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Elisa 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 Elisa Oyj will offset losses from the drop in Elisa Oyj's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Elisa Oyj vs. Kesko Oyj | Elisa Oyj vs. Sampo Oyj A | Elisa Oyj vs. UPM Kymmene Oyj | Elisa Oyj vs. Orion Oyj B |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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