Correlation Between Konecranes Plc and Valmet Oyj
Can any of the company-specific risk be diversified away by investing in both Konecranes Plc and Valmet 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 Konecranes Plc and Valmet Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Konecranes Plc and Valmet Oyj, you can compare the effects of market volatilities on Konecranes Plc and Valmet 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 Konecranes Plc with a short position of Valmet Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konecranes Plc and Valmet Oyj.
Diversification Opportunities for Konecranes Plc and Valmet Oyj
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Konecranes and Valmet is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Konecranes Plc and Valmet Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valmet Oyj and Konecranes Plc 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 Konecranes Plc are associated (or correlated) with Valmet Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valmet Oyj has no effect on the direction of Konecranes Plc i.e., Konecranes Plc and Valmet Oyj go up and down completely randomly.
Pair Corralation between Konecranes Plc and Valmet Oyj
Assuming the 90 days trading horizon Konecranes Plc is expected to generate 1.07 times more return on investment than Valmet Oyj. However, Konecranes Plc is 1.07 times more volatile than Valmet Oyj. It trades about 0.02 of its potential returns per unit of risk. Valmet Oyj is currently generating about -0.3 per unit of risk. If you would invest 6,300 in Konecranes Plc on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Konecranes Plc or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konecranes Plc vs. Valmet Oyj
Performance |
| Timeline |
| Konecranes Plc |
| Valmet Oyj |
Konecranes Plc and Valmet Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konecranes Plc and Valmet Oyj
The main advantage of trading using opposite Konecranes Plc and Valmet Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konecranes Plc position performs unexpectedly, Valmet 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 Valmet Oyj will offset losses from the drop in Valmet Oyj's long position.| Konecranes Plc vs. Cargotec Oyj | Konecranes Plc vs. Sampo Oyj A | Konecranes Plc vs. Wartsila Oyj Abp | Konecranes Plc vs. Valmet Oyj |
| Valmet Oyj vs. Aktia Bank Abp | Valmet Oyj vs. Alandsbanken Abp B | Valmet Oyj vs. Alandsbanken Abp A | Valmet Oyj vs. Sampo Oyj A |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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