Correlation Between Fortum Oyj and Altius Renewable
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and Altius Renewable 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 Fortum Oyj and Altius Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortum Oyj ADR and Altius Renewable Royalties, you can compare the effects of market volatilities on Fortum Oyj and Altius Renewable 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 Fortum Oyj with a short position of Altius Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and Altius Renewable.
Diversification Opportunities for Fortum Oyj and Altius Renewable
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fortum and Altius is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj ADR and Altius Renewable Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Renewable Roy and Fortum 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 Fortum Oyj ADR are associated (or correlated) with Altius Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Renewable Roy has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and Altius Renewable go up and down completely randomly.
Pair Corralation between Fortum Oyj and Altius Renewable
Assuming the 90 days horizon Fortum Oyj ADR is expected to generate 7.95 times more return on investment than Altius Renewable. However, Fortum Oyj is 7.95 times more volatile than Altius Renewable Royalties. It trades about 0.0 of its potential returns per unit of risk. Altius Renewable Royalties is currently generating about -0.1 per unit of risk. If you would invest 292.00 in Fortum Oyj ADR on August 31, 2024 and sell it today you would lose (2.00) from holding Fortum Oyj ADR or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortum Oyj ADR vs. Altius Renewable Royalties
Performance |
| Timeline |
| Fortum Oyj ADR |
| Altius Renewable Roy |
Fortum Oyj and Altius Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and Altius Renewable
The main advantage of trading using opposite Fortum Oyj and Altius Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, Altius Renewable 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 Altius Renewable will offset losses from the drop in Altius Renewable's long position.| Fortum Oyj vs. Constellation Energy Corp | Fortum Oyj vs. Astra Energy | Fortum Oyj vs. Powertap Hydrogen Capital | Fortum Oyj vs. Brenmiller Energy Ltd |
| Altius Renewable vs. Astra Energy | Altius Renewable vs. Carnegie Clean Energy | Altius Renewable vs. Brenmiller Energy Ltd | Altius Renewable vs. Clean Vision Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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