Correlation Between Gofore Oyj and TietoEVRY Corp
Can any of the company-specific risk be diversified away by investing in both Gofore Oyj and TietoEVRY Corp 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 Gofore Oyj and TietoEVRY Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gofore Oyj and TietoEVRY Corp, you can compare the effects of market volatilities on Gofore Oyj and TietoEVRY Corp 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 Gofore Oyj with a short position of TietoEVRY Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gofore Oyj and TietoEVRY Corp.
Diversification Opportunities for Gofore Oyj and TietoEVRY Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gofore and TietoEVRY is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gofore Oyj and TietoEVRY Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Corp and Gofore 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 Gofore Oyj are associated (or correlated) with TietoEVRY Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Corp has no effect on the direction of Gofore Oyj i.e., Gofore Oyj and TietoEVRY Corp go up and down completely randomly.
Pair Corralation between Gofore Oyj and TietoEVRY Corp
Assuming the 90 days trading horizon Gofore Oyj is expected to generate 1.52 times more return on investment than TietoEVRY Corp. However, Gofore Oyj is 1.52 times more volatile than TietoEVRY Corp. It trades about -0.15 of its potential returns per unit of risk. TietoEVRY Corp is currently generating about -0.34 per unit of risk. If you would invest 2,275 in Gofore Oyj on August 27, 2024 and sell it today you would lose (125.00) from holding Gofore Oyj or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gofore Oyj vs. TietoEVRY Corp
Performance |
| Timeline |
| Gofore Oyj |
| TietoEVRY Corp |
Gofore Oyj and TietoEVRY Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gofore Oyj and TietoEVRY Corp
The main advantage of trading using opposite Gofore Oyj and TietoEVRY Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gofore Oyj position performs unexpectedly, TietoEVRY Corp 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 TietoEVRY Corp will offset losses from the drop in TietoEVRY Corp's long position.| Gofore Oyj vs. Qt Group Oyj | Gofore Oyj vs. Harvia Oyj | Gofore Oyj vs. TietoEVRY Corp | Gofore Oyj vs. Kamux Suomi Oy |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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