Correlation Between Elecster Oyj and Raute Oyj
Can any of the company-specific risk be diversified away by investing in both Elecster Oyj and Raute 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 Raute 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 Raute Oyj, you can compare the effects of market volatilities on Elecster Oyj and Raute 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 Raute Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elecster Oyj and Raute Oyj.
Diversification Opportunities for Elecster Oyj and Raute Oyj
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elecster and Raute is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Elecster Oyj A and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute 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 Raute Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raute Oyj has no effect on the direction of Elecster Oyj i.e., Elecster Oyj and Raute Oyj go up and down completely randomly.
Pair Corralation between Elecster Oyj and Raute Oyj
Assuming the 90 days trading horizon Elecster Oyj A is expected to under-perform the Raute Oyj. In addition to that, Elecster Oyj is 1.63 times more volatile than Raute Oyj. It trades about -0.07 of its total potential returns per unit of risk. Raute Oyj is currently generating about 0.04 per unit of volatility. If you would invest 1,260 in Raute Oyj on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Raute Oyj or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Elecster Oyj A vs. Raute Oyj
Performance |
| Timeline |
| Elecster Oyj A |
| Raute Oyj |
Elecster Oyj and Raute Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elecster Oyj and Raute Oyj
The main advantage of trading using opposite Elecster Oyj and Raute Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elecster Oyj position performs unexpectedly, Raute 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 Raute Oyj will offset losses from the drop in Raute 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 |
| Raute Oyj vs. Telefonaktiebolaget LM Ericsson | Raute Oyj vs. SSAB AB ser | Raute Oyj vs. SSAB AB ser | Raute Oyj vs. Telia Company AB |
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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