Correlation Between Metso Oyj and PunaMusta Media
Can any of the company-specific risk be diversified away by investing in both Metso Oyj and PunaMusta Media 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 Metso Oyj and PunaMusta Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metso Oyj and PunaMusta Media Oyj, you can compare the effects of market volatilities on Metso Oyj and PunaMusta Media 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 Metso Oyj with a short position of PunaMusta Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metso Oyj and PunaMusta Media.
Diversification Opportunities for Metso Oyj and PunaMusta Media
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metso and PunaMusta is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Metso Oyj and PunaMusta Media Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PunaMusta Media Oyj and Metso 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 Metso Oyj are associated (or correlated) with PunaMusta Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PunaMusta Media Oyj has no effect on the direction of Metso Oyj i.e., Metso Oyj and PunaMusta Media go up and down completely randomly.
Pair Corralation between Metso Oyj and PunaMusta Media
Assuming the 90 days trading horizon Metso Oyj is expected to generate 0.77 times more return on investment than PunaMusta Media. However, Metso Oyj is 1.29 times less risky than PunaMusta Media. It trades about -0.09 of its potential returns per unit of risk. PunaMusta Media Oyj is currently generating about -0.18 per unit of risk. If you would invest 1,053 in Metso Oyj on September 3, 2024 and sell it today you would lose (220.00) from holding Metso Oyj or give up 20.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.94% |
| Values | Daily Returns |
Metso Oyj vs. PunaMusta Media Oyj
Performance |
| Timeline |
| Metso Oyj |
| PunaMusta Media Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Metso Oyj and PunaMusta Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metso Oyj and PunaMusta Media
The main advantage of trading using opposite Metso Oyj and PunaMusta Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metso Oyj position performs unexpectedly, PunaMusta Media 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 PunaMusta Media will offset losses from the drop in PunaMusta Media's long position.| Metso Oyj vs. Aiforia Technologies Oyj | Metso Oyj vs. Trainers House Oyj | Metso Oyj vs. Detection Technology OY | Metso Oyj vs. Nightingale Health Oyj |
| PunaMusta Media vs. Raute Oyj | PunaMusta Media vs. Suominen Oyj | PunaMusta Media vs. Elecster Oyj A | PunaMusta Media vs. Siili Solutions 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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