Correlation Between Lassila Tikanoja and Enento Group
Can any of the company-specific risk be diversified away by investing in both Lassila Tikanoja and Enento Group 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 Lassila Tikanoja and Enento Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lassila Tikanoja Oyj and Enento Group Plc, you can compare the effects of market volatilities on Lassila Tikanoja and Enento Group 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 Lassila Tikanoja with a short position of Enento Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassila Tikanoja and Enento Group.
Diversification Opportunities for Lassila Tikanoja and Enento Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lassila and Enento is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lassila Tikanoja Oyj and Enento Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enento Group Plc and Lassila Tikanoja 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 Lassila Tikanoja Oyj are associated (or correlated) with Enento Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enento Group Plc has no effect on the direction of Lassila Tikanoja i.e., Lassila Tikanoja and Enento Group go up and down completely randomly.
Pair Corralation between Lassila Tikanoja and Enento Group
Assuming the 90 days trading horizon Lassila Tikanoja Oyj is expected to under-perform the Enento Group. But the stock apears to be less risky and, when comparing its historical volatility, Lassila Tikanoja Oyj is 2.91 times less risky than Enento Group. The stock trades about -0.38 of its potential returns per unit of risk. The Enento Group Plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,793 in Enento Group Plc on August 31, 2024 and sell it today you would earn a total of 49.00 from holding Enento Group Plc or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lassila Tikanoja Oyj vs. Enento Group Plc
Performance |
| Timeline |
| Lassila Tikanoja Oyj |
| Enento Group Plc |
Lassila Tikanoja and Enento Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lassila Tikanoja and Enento Group
The main advantage of trading using opposite Lassila Tikanoja and Enento Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lassila Tikanoja position performs unexpectedly, Enento Group 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 Enento Group will offset losses from the drop in Enento Group's long position.| Lassila Tikanoja vs. Tokmanni Group Oyj | Lassila Tikanoja vs. TietoEVRY Corp | Lassila Tikanoja vs. Kemira Oyj | Lassila Tikanoja vs. Konecranes Plc |
| Enento Group vs. Tokmanni Group Oyj | Enento Group vs. Konecranes Plc | Enento Group vs. Lassila Tikanoja Oyj | Enento Group vs. Metsa Board Oyj |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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