Correlation Between CapMan Oyj and SSH Communications
Can any of the company-specific risk be diversified away by investing in both CapMan Oyj and SSH Communications 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 CapMan Oyj and SSH Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapMan Oyj B and SSH Communications Security, you can compare the effects of market volatilities on CapMan Oyj and SSH Communications 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 CapMan Oyj with a short position of SSH Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapMan Oyj and SSH Communications.
Diversification Opportunities for CapMan Oyj and SSH Communications
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CapMan and SSH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CapMan Oyj B and SSH Communications Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSH Communications and CapMan 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 CapMan Oyj B are associated (or correlated) with SSH Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSH Communications has no effect on the direction of CapMan Oyj i.e., CapMan Oyj and SSH Communications go up and down completely randomly.
Pair Corralation between CapMan Oyj and SSH Communications
Assuming the 90 days trading horizon CapMan Oyj B is expected to generate 0.33 times more return on investment than SSH Communications. However, CapMan Oyj B is 3.04 times less risky than SSH Communications. It trades about 0.03 of its potential returns per unit of risk. SSH Communications Security is currently generating about -0.15 per unit of risk. If you would invest 181.00 in CapMan Oyj B on August 30, 2024 and sell it today you would earn a total of 1.00 from holding CapMan Oyj B or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapMan Oyj B vs. SSH Communications Security
Performance |
| Timeline |
| CapMan Oyj B |
| SSH Communications |
CapMan Oyj and SSH Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapMan Oyj and SSH Communications
The main advantage of trading using opposite CapMan Oyj and SSH Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapMan Oyj position performs unexpectedly, SSH Communications 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 SSH Communications will offset losses from the drop in SSH Communications' long position.| CapMan Oyj vs. Aktia Bank Abp | CapMan Oyj vs. Alandsbanken Abp A | CapMan Oyj vs. Oma Saastopankki Oyj | CapMan Oyj vs. Tokmanni Group Oyj |
| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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