Correlation Between Elisa Oyj and Terveystalo
Can any of the company-specific risk be diversified away by investing in both Elisa Oyj and Terveystalo 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 Elisa Oyj and Terveystalo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elisa Oyj and Terveystalo Oy, you can compare the effects of market volatilities on Elisa Oyj and Terveystalo 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 Elisa Oyj with a short position of Terveystalo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elisa Oyj and Terveystalo.
Diversification Opportunities for Elisa Oyj and Terveystalo
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elisa and Terveystalo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elisa Oyj and Terveystalo Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terveystalo Oy and Elisa 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 Elisa Oyj are associated (or correlated) with Terveystalo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terveystalo Oy has no effect on the direction of Elisa Oyj i.e., Elisa Oyj and Terveystalo go up and down completely randomly.
Pair Corralation between Elisa Oyj and Terveystalo
Assuming the 90 days trading horizon Elisa Oyj is expected to generate 4.83 times less return on investment than Terveystalo. But when comparing it to its historical volatility, Elisa Oyj is 1.53 times less risky than Terveystalo. It trades about 0.03 of its potential returns per unit of risk. Terveystalo Oy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 732.00 in Terveystalo Oy on September 14, 2024 and sell it today you would earn a total of 336.00 from holding Terveystalo Oy or generate 45.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Elisa Oyj vs. Terveystalo Oy
Performance |
| Timeline |
| Elisa Oyj |
| Terveystalo Oy |
Elisa Oyj and Terveystalo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elisa Oyj and Terveystalo
The main advantage of trading using opposite Elisa Oyj and Terveystalo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elisa Oyj position performs unexpectedly, Terveystalo 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 Terveystalo will offset losses from the drop in Terveystalo's long position.| Elisa Oyj vs. Kesko Oyj | Elisa Oyj vs. Sampo Oyj A | Elisa Oyj vs. UPM Kymmene Oyj | Elisa Oyj vs. Orion Oyj B |
| Terveystalo vs. Sampo Oyj A | Terveystalo vs. UPM Kymmene Oyj | Terveystalo vs. Wartsila Oyj Abp | Terveystalo vs. Elisa 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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