Correlation Between Atria Oyj and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Atria Oyj and Wartsila 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 Atria Oyj and Wartsila Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atria Oyj A and Wartsila Oyj Abp, you can compare the effects of market volatilities on Atria Oyj and Wartsila 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 Atria Oyj with a short position of Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atria Oyj and Wartsila Oyj.
Diversification Opportunities for Atria Oyj and Wartsila Oyj
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atria and Wartsila is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Atria Oyj A and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp and Atria 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 Atria Oyj A are associated (or correlated) with Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Atria Oyj i.e., Atria Oyj and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Atria Oyj and Wartsila Oyj
Assuming the 90 days trading horizon Atria Oyj is expected to generate 2.62 times less return on investment than Wartsila Oyj. But when comparing it to its historical volatility, Atria Oyj A is 1.54 times less risky than Wartsila Oyj. It trades about 0.05 of its potential returns per unit of risk. Wartsila Oyj Abp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Wartsila Oyj Abp on September 4, 2024 and sell it today you would earn a total of 964.00 from holding Wartsila Oyj Abp or generate 119.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atria Oyj A vs. Wartsila Oyj Abp
Performance |
| Timeline |
| Atria Oyj A |
| Wartsila Oyj Abp |
Atria Oyj and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atria Oyj and Wartsila Oyj
The main advantage of trading using opposite Atria Oyj and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atria Oyj position performs unexpectedly, Wartsila 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 Wartsila Oyj will offset losses from the drop in Wartsila Oyj's long position.| Atria Oyj vs. Wartsila Oyj Abp | Atria Oyj vs. Telia Company AB | Atria Oyj vs. Tokmanni Group Oyj | Atria Oyj vs. Kemira Oyj |
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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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