Correlation Between Exel Composites and Tecnotree Oyj
Can any of the company-specific risk be diversified away by investing in both Exel Composites and Tecnotree 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 Tecnotree 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 Tecnotree Oyj, you can compare the effects of market volatilities on Exel Composites and Tecnotree 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 Tecnotree Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Tecnotree Oyj.
Diversification Opportunities for Exel Composites and Tecnotree Oyj
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exel and Tecnotree is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Tecnotree Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecnotree 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 Tecnotree Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecnotree Oyj has no effect on the direction of Exel Composites i.e., Exel Composites and Tecnotree Oyj go up and down completely randomly.
Pair Corralation between Exel Composites and Tecnotree Oyj
Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Tecnotree Oyj. In addition to that, Exel Composites is 1.44 times more volatile than Tecnotree Oyj. It trades about -0.1 of its total potential returns per unit of risk. Tecnotree Oyj is currently generating about -0.08 per unit of volatility. If you would invest 1,244 in Tecnotree Oyj on August 27, 2024 and sell it today you would lose (944.00) from holding Tecnotree Oyj or give up 75.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exel Composites Oyj vs. Tecnotree Oyj
Performance |
| Timeline |
| Exel Composites Oyj |
| Tecnotree Oyj |
Exel Composites and Tecnotree Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exel Composites and Tecnotree Oyj
The main advantage of trading using opposite Exel Composites and Tecnotree Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Composites position performs unexpectedly, Tecnotree 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 Tecnotree Oyj will offset losses from the drop in Tecnotree Oyj's long position.| Exel Composites vs. Aktia Bank Abp | Exel Composites vs. Alandsbanken Abp B | Exel Composites vs. Alandsbanken Abp A | Exel Composites vs. Sampo Oyj A |
| Tecnotree Oyj vs. CapMan Oyj B | Tecnotree Oyj vs. HKFoods Oyj A | Tecnotree Oyj vs. KONE Oyj | Tecnotree 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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