Correlation Between Stora Enso and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Stora Enso and ONWARD MEDICAL 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 Stora Enso and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and ONWARD MEDICAL BV, you can compare the effects of market volatilities on Stora Enso and ONWARD MEDICAL 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 Stora Enso with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and ONWARD MEDICAL.
Diversification Opportunities for Stora Enso and ONWARD MEDICAL
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stora and ONWARD is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and Stora Enso 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 Stora Enso Oyj are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Stora Enso i.e., Stora Enso and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Stora Enso and ONWARD MEDICAL
Assuming the 90 days trading horizon Stora Enso Oyj is expected to under-perform the ONWARD MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Stora Enso Oyj is 1.83 times less risky than ONWARD MEDICAL. The stock trades about -0.14 of its potential returns per unit of risk. The ONWARD MEDICAL BV is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 512.00 in ONWARD MEDICAL BV on September 2, 2024 and sell it today you would lose (70.00) from holding ONWARD MEDICAL BV or give up 13.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| Stora Enso Oyj |
| ONWARD MEDICAL BV |
Stora Enso and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and ONWARD MEDICAL
The main advantage of trading using opposite Stora Enso and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| Stora Enso vs. DXC Technology Co | Stora Enso vs. ONWARD MEDICAL BV | Stora Enso vs. X FAB Silicon Foundries | Stora Enso vs. Wayside Technology Group |
| ONWARD MEDICAL vs. MOLSON RS BEVERAGE | ONWARD MEDICAL vs. Lamar Advertising | ONWARD MEDICAL vs. TYSON FOODS A | ONWARD MEDICAL vs. Austevoll Seafood ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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