Correlation Between Croda International and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Croda International and Stora Enso 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 Croda International and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Croda International PLC and Stora Enso Oyj, you can compare the effects of market volatilities on Croda International and Stora Enso 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 Croda International with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croda International and Stora Enso.
Diversification Opportunities for Croda International and Stora Enso
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Croda and Stora is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Croda International PLC and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Croda International 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 Croda International PLC are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Croda International i.e., Croda International and Stora Enso go up and down completely randomly.
Pair Corralation between Croda International and Stora Enso
If you would invest 1,120 in Stora Enso Oyj on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Stora Enso Oyj or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Croda International PLC vs. Stora Enso Oyj
Performance |
| Timeline |
| Croda International PLC |
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Croda International and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Croda International and Stora Enso
The main advantage of trading using opposite Croda International and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croda International position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Croda International vs. PPG Industries | Croda International vs. Ecolab Inc | Croda International vs. Sherwin Williams Co | Croda International vs. Air Products and |
| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater Paper |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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