Correlation Between EcoUp Oyj and Exel Composites
Can any of the company-specific risk be diversified away by investing in both EcoUp Oyj and Exel Composites 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 Exel Composites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EcoUp Oyj and Exel Composites Oyj, you can compare the effects of market volatilities on EcoUp Oyj and Exel Composites 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 Exel Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of EcoUp Oyj and Exel Composites.
Diversification Opportunities for EcoUp Oyj and Exel Composites
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EcoUp and Exel is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EcoUp Oyj and Exel Composites Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Composites Oyj 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 Exel Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Composites Oyj has no effect on the direction of EcoUp Oyj i.e., EcoUp Oyj and Exel Composites go up and down completely randomly.
Pair Corralation between EcoUp Oyj and Exel Composites
Assuming the 90 days trading horizon EcoUp Oyj is expected to generate 1.48 times more return on investment than Exel Composites. However, EcoUp Oyj is 1.48 times more volatile than Exel Composites Oyj. It trades about -0.22 of its potential returns per unit of risk. Exel Composites Oyj is currently generating about -0.45 per unit of risk. If you would invest 200.00 in EcoUp Oyj on August 31, 2024 and sell it today you would lose (38.00) from holding EcoUp Oyj or give up 19.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EcoUp Oyj vs. Exel Composites Oyj
Performance |
| Timeline |
| EcoUp Oyj |
| Exel Composites Oyj |
EcoUp Oyj and Exel Composites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EcoUp Oyj and Exel Composites
The main advantage of trading using opposite EcoUp Oyj and Exel Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EcoUp Oyj position performs unexpectedly, Exel Composites 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 Exel Composites will offset losses from the drop in Exel Composites' long position.| EcoUp Oyj vs. Kamux Suomi Oy | EcoUp Oyj vs. Harvia Oyj | EcoUp Oyj vs. Qt Group Oyj | EcoUp Oyj vs. Tecnotree Oyj |
| Exel Composites vs. Admicom Oyj | Exel Composites vs. Talenom Oyj | Exel Composites vs. Vincit Group Oyj | Exel Composites vs. Harvia 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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