Correlation Between Elisa Oyj and Vaisala Oyj
Can any of the company-specific risk be diversified away by investing in both Elisa Oyj and Vaisala 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 Elisa Oyj and Vaisala Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elisa Oyj and Vaisala Oyj A, you can compare the effects of market volatilities on Elisa Oyj and Vaisala 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 Elisa Oyj with a short position of Vaisala Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elisa Oyj and Vaisala Oyj.
Diversification Opportunities for Elisa Oyj and Vaisala Oyj
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elisa and Vaisala is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Elisa Oyj and Vaisala Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaisala Oyj A 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 Vaisala Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaisala Oyj A has no effect on the direction of Elisa Oyj i.e., Elisa Oyj and Vaisala Oyj go up and down completely randomly.
Pair Corralation between Elisa Oyj and Vaisala Oyj
Assuming the 90 days trading horizon Elisa Oyj is expected to under-perform the Vaisala Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Elisa Oyj is 1.86 times less risky than Vaisala Oyj. The stock trades about -0.01 of its potential returns per unit of risk. The Vaisala Oyj A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,865 in Vaisala Oyj A on August 27, 2024 and sell it today you would earn a total of 885.00 from holding Vaisala Oyj A or generate 22.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elisa Oyj vs. Vaisala Oyj A
Performance |
| Timeline |
| Elisa Oyj |
| Vaisala Oyj A |
Elisa Oyj and Vaisala Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elisa Oyj and Vaisala Oyj
The main advantage of trading using opposite Elisa Oyj and Vaisala Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elisa Oyj position performs unexpectedly, Vaisala 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 Vaisala Oyj will offset losses from the drop in Vaisala Oyj'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 |
| Vaisala Oyj vs. CapMan Oyj B | Vaisala Oyj vs. HKFoods Oyj A | Vaisala Oyj vs. KONE Oyj | Vaisala Oyj vs. Exel Composites 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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