Correlation Between Elecster Oyj and KONE Oyj
Can any of the company-specific risk be diversified away by investing in both Elecster Oyj and KONE Oyj 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 Elecster Oyj and KONE Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elecster Oyj A and KONE Oyj, you can compare the effects of market volatilities on Elecster Oyj and KONE Oyj 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 Elecster Oyj with a short position of KONE Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elecster Oyj and KONE Oyj.
Diversification Opportunities for Elecster Oyj and KONE Oyj
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elecster and KONE is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Elecster Oyj A and KONE Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KONE Oyj and Elecster 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 Elecster Oyj A are associated (or correlated) with KONE Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KONE Oyj has no effect on the direction of Elecster Oyj i.e., Elecster Oyj and KONE Oyj go up and down completely randomly.
Pair Corralation between Elecster Oyj and KONE Oyj
Assuming the 90 days trading horizon Elecster Oyj A is expected to generate 3.22 times more return on investment than KONE Oyj. However, Elecster Oyj is 3.22 times more volatile than KONE Oyj. It trades about 0.01 of its potential returns per unit of risk. KONE Oyj is currently generating about -0.25 per unit of risk. If you would invest 348.00 in Elecster Oyj A on August 30, 2024 and sell it today you would lose (2.00) from holding Elecster Oyj A or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Elecster Oyj A vs. KONE Oyj
Performance |
| Timeline |
| Elecster Oyj A |
| KONE Oyj |
Elecster Oyj and KONE Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elecster Oyj and KONE Oyj
The main advantage of trading using opposite Elecster Oyj and KONE Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elecster Oyj position performs unexpectedly, KONE Oyj 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 KONE Oyj will offset losses from the drop in KONE Oyj's long position.| Elecster Oyj vs. Raute Oyj | Elecster Oyj vs. Honkarakenne Oyj B | Elecster Oyj vs. Wulff Yhtiot Oy | Elecster Oyj vs. Biohit Oyj B |
| KONE Oyj vs. Sampo Oyj A | KONE Oyj vs. Fortum Oyj | KONE Oyj vs. UPM Kymmene Oyj | KONE Oyj vs. Neste Oil 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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