Correlation Between EcoUp Oyj and Alandsbanken Abp
Can any of the company-specific risk be diversified away by investing in both EcoUp Oyj and Alandsbanken Abp 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 EcoUp Oyj and Alandsbanken Abp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EcoUp Oyj and Alandsbanken Abp A, you can compare the effects of market volatilities on EcoUp Oyj and Alandsbanken Abp 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 EcoUp Oyj with a short position of Alandsbanken Abp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EcoUp Oyj and Alandsbanken Abp.
Diversification Opportunities for EcoUp Oyj and Alandsbanken Abp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EcoUp and Alandsbanken is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding EcoUp Oyj and Alandsbanken Abp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alandsbanken Abp A and EcoUp 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 EcoUp Oyj are associated (or correlated) with Alandsbanken Abp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alandsbanken Abp A has no effect on the direction of EcoUp Oyj i.e., EcoUp Oyj and Alandsbanken Abp go up and down completely randomly.
Pair Corralation between EcoUp Oyj and Alandsbanken Abp
Assuming the 90 days trading horizon EcoUp Oyj is expected to generate 3.73 times more return on investment than Alandsbanken Abp. However, EcoUp Oyj is 3.73 times more volatile than Alandsbanken Abp A. It trades about 0.04 of its potential returns per unit of risk. Alandsbanken Abp A is currently generating about 0.1 per unit of risk. If you would invest 220.00 in EcoUp Oyj on November 28, 2024 and sell it today you would earn a total of 4.00 from holding EcoUp Oyj or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EcoUp Oyj vs. Alandsbanken Abp A
Performance |
| Timeline |
| EcoUp Oyj |
| Alandsbanken Abp A |
EcoUp Oyj and Alandsbanken Abp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EcoUp Oyj and Alandsbanken Abp
The main advantage of trading using opposite EcoUp Oyj and Alandsbanken Abp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EcoUp Oyj position performs unexpectedly, Alandsbanken Abp 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 Alandsbanken Abp will offset losses from the drop in Alandsbanken Abp's long position.| EcoUp Oyj vs. Remedy Entertainment Oyj | EcoUp Oyj vs. Detection Technology OY | EcoUp Oyj vs. United Bankers Oyj | EcoUp Oyj vs. SSH Communications Security |
| Alandsbanken Abp vs. Aktia Bank Abp | Alandsbanken Abp vs. Alandsbanken Abp B | Alandsbanken Abp vs. CapMan Oyj B | Alandsbanken Abp vs. Tokmanni Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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