Correlation Between Kemira Oyj and Etteplan Oyj
Can any of the company-specific risk be diversified away by investing in both Kemira Oyj and Etteplan 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 Kemira Oyj and Etteplan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemira Oyj and Etteplan Oyj, you can compare the effects of market volatilities on Kemira Oyj and Etteplan 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 Kemira Oyj with a short position of Etteplan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemira Oyj and Etteplan Oyj.
Diversification Opportunities for Kemira Oyj and Etteplan Oyj
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kemira and Etteplan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kemira Oyj and Etteplan Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etteplan Oyj and Kemira 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 Kemira Oyj are associated (or correlated) with Etteplan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etteplan Oyj has no effect on the direction of Kemira Oyj i.e., Kemira Oyj and Etteplan Oyj go up and down completely randomly.
Pair Corralation between Kemira Oyj and Etteplan Oyj
Assuming the 90 days trading horizon Kemira Oyj is expected to under-perform the Etteplan Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Kemira Oyj is 1.29 times less risky than Etteplan Oyj. The stock trades about -0.23 of its potential returns per unit of risk. The Etteplan Oyj is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Etteplan Oyj on August 30, 2024 and sell it today you would lose (50.00) from holding Etteplan Oyj or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kemira Oyj vs. Etteplan Oyj
Performance |
| Timeline |
| Kemira Oyj |
| Etteplan Oyj |
Kemira Oyj and Etteplan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemira Oyj and Etteplan Oyj
The main advantage of trading using opposite Kemira Oyj and Etteplan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemira Oyj position performs unexpectedly, Etteplan 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 Etteplan Oyj will offset losses from the drop in Etteplan Oyj's long position.| Kemira Oyj vs. UPM Kymmene Oyj | Kemira Oyj vs. Stora Enso Oyj | Kemira Oyj vs. Valmet Oyj | Kemira Oyj vs. Wartsila Oyj Abp |
| Etteplan Oyj vs. Telefonaktiebolaget LM Ericsson | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. Telia Company AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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