Correlation Between IT Tech and Stora Enso
Can any of the company-specific risk be diversified away by investing in both IT Tech and Stora Enso 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 IT Tech and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IT Tech Packaging and Stora Enso Oyj, you can compare the effects of market volatilities on IT Tech and Stora Enso 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 IT Tech with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of IT Tech and Stora Enso.
Diversification Opportunities for IT Tech and Stora Enso
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ITP and Stora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IT Tech Packaging and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and IT Tech 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 IT Tech Packaging are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of IT Tech i.e., IT Tech and Stora Enso go up and down completely randomly.
Pair Corralation between IT Tech and Stora Enso
If you would invest 26.00 in IT Tech Packaging on November 9, 2024 and sell it today you would earn a total of 7.00 from holding IT Tech Packaging or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
IT Tech Packaging vs. Stora Enso Oyj
Performance |
| Timeline |
| IT Tech Packaging |
| Stora Enso Oyj |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
IT Tech and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IT Tech and Stora Enso
The main advantage of trading using opposite IT Tech and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IT Tech position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| IT Tech vs. Mondi PLC ADR | IT Tech vs. Holmen AB ADR | IT Tech vs. Canfor Pulp Products | IT Tech vs. Nine Dragons Paper |
| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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