Correlation Between Icahn Enterprises and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both Icahn Enterprises and Neste 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 Icahn Enterprises and Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icahn Enterprises LP and Neste Oyj, you can compare the effects of market volatilities on Icahn Enterprises and Neste 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 Icahn Enterprises with a short position of Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icahn Enterprises and Neste Oyj.
Diversification Opportunities for Icahn Enterprises and Neste Oyj
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icahn and Neste is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Icahn Enterprises LP and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj and Icahn Enterprises 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 Icahn Enterprises LP are associated (or correlated) with Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of Icahn Enterprises i.e., Icahn Enterprises and Neste Oyj go up and down completely randomly.
Pair Corralation between Icahn Enterprises and Neste Oyj
Considering the 90-day investment horizon Icahn Enterprises LP is expected to under-perform the Neste Oyj. In addition to that, Icahn Enterprises is 1.18 times more volatile than Neste Oyj. It trades about -0.16 of its total potential returns per unit of risk. Neste Oyj is currently generating about -0.08 per unit of volatility. If you would invest 789.00 in Neste Oyj on August 31, 2024 and sell it today you would lose (43.00) from holding Neste Oyj or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icahn Enterprises LP vs. Neste Oyj
Performance |
| Timeline |
| Icahn Enterprises |
| Neste Oyj |
Icahn Enterprises and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icahn Enterprises and Neste Oyj
The main advantage of trading using opposite Icahn Enterprises and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icahn Enterprises position performs unexpectedly, Neste 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| Icahn Enterprises vs. Delek Energy | Icahn Enterprises vs. PBF Energy | Icahn Enterprises vs. HF Sinclair Corp | Icahn Enterprises vs. Delek Logistics Partners |
| Neste Oyj vs. Icahn Enterprises LP | Neste Oyj vs. Star Gas Partners | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Par Pacific Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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