Correlation Between GLT Old and UPM-Kymmene Oyj
Can any of the company-specific risk be diversified away by investing in both GLT Old and UPM-Kymmene 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 GLT Old and UPM-Kymmene Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLT Old and UPM Kymmene Oyj, you can compare the effects of market volatilities on GLT Old and UPM-Kymmene 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 GLT Old with a short position of UPM-Kymmene Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLT Old and UPM-Kymmene Oyj.
Diversification Opportunities for GLT Old and UPM-Kymmene Oyj
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GLT and UPM-Kymmene is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GLT Old and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene Oyj and GLT Old 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 GLT Old are associated (or correlated) with UPM-Kymmene Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of GLT Old i.e., GLT Old and UPM-Kymmene Oyj go up and down completely randomly.
Pair Corralation between GLT Old and UPM-Kymmene Oyj
Considering the 90-day investment horizon GLT Old is expected to under-perform the UPM-Kymmene Oyj. In addition to that, GLT Old is 4.39 times more volatile than UPM Kymmene Oyj. It trades about -0.01 of its total potential returns per unit of risk. UPM Kymmene Oyj is currently generating about -0.01 per unit of volatility. If you would invest 3,322 in UPM Kymmene Oyj on November 1, 2024 and sell it today you would lose (408.00) from holding UPM Kymmene Oyj or give up 12.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.64% |
| Values | Daily Returns |
GLT Old vs. UPM Kymmene Oyj
Performance |
| Timeline |
| GLT Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| UPM Kymmene Oyj |
GLT Old and UPM-Kymmene Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLT Old and UPM-Kymmene Oyj
The main advantage of trading using opposite GLT Old and UPM-Kymmene Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLT Old position performs unexpectedly, UPM-Kymmene 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 UPM-Kymmene Oyj will offset losses from the drop in UPM-Kymmene Oyj's long position.| GLT Old vs. Mercer International | GLT Old vs. Sylvamo Corp | GLT Old vs. Suzano Papel e | GLT Old vs. UPM Kymmene Oyj |
| UPM-Kymmene Oyj vs. Mercer International | UPM-Kymmene Oyj vs. Sylvamo Corp | UPM-Kymmene Oyj vs. Suzano Papel e | UPM-Kymmene Oyj vs. Clearwater Paper |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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