Correlation Between Cargotec Oyj and Konecranes Plc
Can any of the company-specific risk be diversified away by investing in both Cargotec Oyj and Konecranes Plc 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 Cargotec Oyj and Konecranes Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cargotec Oyj and Konecranes Plc, you can compare the effects of market volatilities on Cargotec Oyj and Konecranes Plc 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 Cargotec Oyj with a short position of Konecranes Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargotec Oyj and Konecranes Plc.
Diversification Opportunities for Cargotec Oyj and Konecranes Plc
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cargotec and Konecranes is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cargotec Oyj and Konecranes Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konecranes Plc and Cargotec 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 Cargotec Oyj are associated (or correlated) with Konecranes Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konecranes Plc has no effect on the direction of Cargotec Oyj i.e., Cargotec Oyj and Konecranes Plc go up and down completely randomly.
Pair Corralation between Cargotec Oyj and Konecranes Plc
Assuming the 90 days trading horizon Cargotec Oyj is expected to generate 1.78 times less return on investment than Konecranes Plc. In addition to that, Cargotec Oyj is 1.44 times more volatile than Konecranes Plc. It trades about 0.04 of its total potential returns per unit of risk. Konecranes Plc is currently generating about 0.1 per unit of volatility. If you would invest 2,677 in Konecranes Plc on August 25, 2024 and sell it today you would earn a total of 3,673 from holding Konecranes Plc or generate 137.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cargotec Oyj vs. Konecranes Plc
Performance |
| Timeline |
| Cargotec Oyj |
| Konecranes Plc |
Cargotec Oyj and Konecranes Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cargotec Oyj and Konecranes Plc
The main advantage of trading using opposite Cargotec Oyj and Konecranes Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargotec Oyj position performs unexpectedly, Konecranes Plc 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 Konecranes Plc will offset losses from the drop in Konecranes Plc's long position.| Cargotec Oyj vs. Alandsbanken Abp A | Cargotec Oyj vs. Sampo Oyj A | Cargotec Oyj vs. Viafin Service Oyj | Cargotec Oyj vs. KONE Oyj |
| Konecranes Plc vs. Cargotec Oyj | Konecranes Plc vs. Sampo Oyj A | Konecranes Plc vs. Wartsila Oyj Abp | Konecranes Plc vs. Valmet 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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