Correlation Between Detection Technology and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Detection Technology and SSAB AB 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 Detection Technology and SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Detection Technology OY and SSAB AB ser, you can compare the effects of market volatilities on Detection Technology and SSAB AB 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 Detection Technology with a short position of SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Detection Technology and SSAB AB.
Diversification Opportunities for Detection Technology and SSAB AB
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Detection and SSAB is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Detection Technology OY and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser and Detection Technology 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 Detection Technology OY are associated (or correlated) with SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Detection Technology i.e., Detection Technology and SSAB AB go up and down completely randomly.
Pair Corralation between Detection Technology and SSAB AB
Assuming the 90 days trading horizon Detection Technology OY is expected to under-perform the SSAB AB. But the stock apears to be less risky and, when comparing its historical volatility, Detection Technology OY is 1.03 times less risky than SSAB AB. The stock trades about -0.01 of its potential returns per unit of risk. The SSAB AB ser is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 531.00 in SSAB AB ser on November 19, 2024 and sell it today you would earn a total of 18.00 from holding SSAB AB ser or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Detection Technology OY vs. SSAB AB ser
Performance |
| Timeline |
| Detection Technology |
| SSAB AB ser |
Detection Technology and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Detection Technology and SSAB AB
The main advantage of trading using opposite Detection Technology and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Detection Technology position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB's long position.| Detection Technology vs. Revenio Group | Detection Technology vs. Remedy Entertainment Oyj | Detection Technology vs. Bittium Oyj | Detection Technology vs. Gofore Oyj |
| SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Nordea Bank Abp | SSAB AB vs. Telia Company AB | SSAB AB vs. Wartsila Oyj Abp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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