Correlation Between LANSON-BCC INH and Altia Oyj
Can any of the company-specific risk be diversified away by investing in both LANSON-BCC INH and Altia 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 LANSON-BCC INH and Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANSON BCC INH EO and Altia Oyj, you can compare the effects of market volatilities on LANSON-BCC INH and Altia 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 LANSON-BCC INH with a short position of Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANSON-BCC INH and Altia Oyj.
Diversification Opportunities for LANSON-BCC INH and Altia Oyj
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LANSON-BCC and Altia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LANSON BCC INH EO and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj and LANSON-BCC INH 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 LANSON BCC INH EO are associated (or correlated) with Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of LANSON-BCC INH i.e., LANSON-BCC INH and Altia Oyj go up and down completely randomly.
Pair Corralation between LANSON-BCC INH and Altia Oyj
Assuming the 90 days horizon LANSON BCC INH EO is expected to generate 0.65 times more return on investment than Altia Oyj. However, LANSON BCC INH EO is 1.53 times less risky than Altia Oyj. It trades about -0.03 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.03 per unit of risk. If you would invest 4,288 in LANSON BCC INH EO on December 2, 2024 and sell it today you would lose (628.00) from holding LANSON BCC INH EO or give up 14.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LANSON BCC INH EO vs. Altia Oyj
Performance |
| Timeline |
| LANSON BCC INH |
| Altia Oyj |
LANSON-BCC INH and Altia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANSON-BCC INH and Altia Oyj
The main advantage of trading using opposite LANSON-BCC INH and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANSON-BCC INH position performs unexpectedly, Altia 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.| LANSON-BCC INH vs. Brown Forman | LANSON-BCC INH vs. Altia Oyj | LANSON-BCC INH vs. MASI AGRICOLA SPA | LANSON-BCC INH vs. VIRGIN WINES UK |
| Altia Oyj vs. Brown Forman | Altia Oyj vs. LANSON BCC INH EO | Altia Oyj vs. MASI AGRICOLA SPA | Altia Oyj vs. VIRGIN WINES UK |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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