Correlation Between Exel Composites and Raute Oyj
Can any of the company-specific risk be diversified away by investing in both Exel Composites 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 Exel Composites and Raute Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exel Composites Oyj and Raute Oyj, you can compare the effects of market volatilities on Exel Composites 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 Exel Composites with a short position of Raute Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Raute Oyj.
Diversification Opportunities for Exel Composites and Raute Oyj
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exel and Raute is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute Oyj and Exel Composites 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 Exel Composites Oyj 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 Exel Composites i.e., Exel Composites and Raute Oyj go up and down completely randomly.
Pair Corralation between Exel Composites and Raute Oyj
Assuming the 90 days trading horizon Exel Composites is expected to generate 9.46 times less return on investment than Raute Oyj. In addition to that, Exel Composites is 1.27 times more volatile than Raute Oyj. It trades about 0.01 of its total potential returns per unit of risk. Raute Oyj is currently generating about 0.06 per unit of volatility. If you would invest 1,115 in Raute Oyj on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Raute Oyj or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exel Composites Oyj vs. Raute Oyj
Performance |
| Timeline |
| Exel Composites Oyj |
| Raute Oyj |
Exel Composites and Raute Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exel Composites and Raute Oyj
The main advantage of trading using opposite Exel Composites and Raute Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Composites 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.| Exel Composites vs. SSH Communications Security | Exel Composites vs. Reka Industrial Oyj | Exel Composites vs. Alandsbanken Abp A | Exel Composites vs. Sotkamo Silver AB |
| Raute Oyj vs. Ponsse Oyj 1 | Raute Oyj vs. Lassila Tikanoja Oyj | Raute Oyj vs. Tokmanni Group Oyj | Raute Oyj vs. CapMan Oyj B |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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