Correlation Between Fortum Oyj and QURATE RETAIL
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and QURATE RETAIL 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 QURATE RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortum Oyj and QURATE RETAIL INC, you can compare the effects of market volatilities on Fortum Oyj and QURATE RETAIL 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 QURATE RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and QURATE RETAIL.
Diversification Opportunities for Fortum Oyj and QURATE RETAIL
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fortum and QURATE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC 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 are associated (or correlated) with QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and QURATE RETAIL go up and down completely randomly.
Pair Corralation between Fortum Oyj and QURATE RETAIL
Assuming the 90 days horizon Fortum Oyj is expected to generate 1.78 times less return on investment than QURATE RETAIL. But when comparing it to its historical volatility, Fortum Oyj is 3.38 times less risky than QURATE RETAIL. It trades about 0.01 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 560.00 in QURATE RETAIL INC on September 13, 2024 and sell it today you would lose (236.00) from holding QURATE RETAIL INC or give up 42.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fortum Oyj vs. QURATE RETAIL INC
Performance |
| Timeline |
| Fortum Oyj |
| QURATE RETAIL INC |
Fortum Oyj and QURATE RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and QURATE RETAIL
The main advantage of trading using opposite Fortum Oyj and QURATE RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, QURATE RETAIL 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 QURATE RETAIL will offset losses from the drop in QURATE RETAIL's long position.| Fortum Oyj vs. VERBUND AG ADR | Fortum Oyj vs. TOHOKU EL PWR | Fortum Oyj vs. BEIJJINGNENG CLERGHYC1 | Fortum Oyj vs. EnviTec Biogas AG |
| QURATE RETAIL vs. Tencent Holdings | QURATE RETAIL vs. Baidu Inc | QURATE RETAIL vs. Alibaba Group Holdings | QURATE RETAIL vs. BYD Company Limited |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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