Correlation Between Cargotec Oyj and Neste Oil
Can any of the company-specific risk be diversified away by investing in both Cargotec Oyj and Neste Oil 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 Neste Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cargotec Oyj and Neste Oil Oyj, you can compare the effects of market volatilities on Cargotec Oyj and Neste Oil 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 Neste Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargotec Oyj and Neste Oil.
Diversification Opportunities for Cargotec Oyj and Neste Oil
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cargotec and Neste is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cargotec Oyj and Neste Oil Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oil Oyj 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 Neste Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oil Oyj has no effect on the direction of Cargotec Oyj i.e., Cargotec Oyj and Neste Oil go up and down completely randomly.
Pair Corralation between Cargotec Oyj and Neste Oil
Assuming the 90 days trading horizon Cargotec Oyj is expected to generate 0.8 times more return on investment than Neste Oil. However, Cargotec Oyj is 1.24 times less risky than Neste Oil. It trades about -0.06 of its potential returns per unit of risk. Neste Oil Oyj is currently generating about -0.07 per unit of risk. If you would invest 5,560 in Cargotec Oyj on August 27, 2024 and sell it today you would lose (170.00) from holding Cargotec Oyj or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cargotec Oyj vs. Neste Oil Oyj
Performance |
| Timeline |
| Cargotec Oyj |
| Neste Oil Oyj |
Cargotec Oyj and Neste Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cargotec Oyj and Neste Oil
The main advantage of trading using opposite Cargotec Oyj and Neste Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargotec Oyj position performs unexpectedly, Neste Oil 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 Neste Oil will offset losses from the drop in Neste Oil's long position.| Cargotec Oyj vs. Aktia Bank Abp | Cargotec Oyj vs. Alandsbanken Abp B | Cargotec Oyj vs. Alandsbanken Abp A | Cargotec Oyj vs. Sampo Oyj A |
| Neste Oil vs. Fortum Oyj | Neste Oil vs. Sampo Oyj A | Neste Oil vs. Nordea Bank Abp | Neste Oil vs. UPM Kymmene 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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