Correlation Between Neste Oyj and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Plastic Omnium 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 Neste Oyj and Plastic Omnium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Plastic Omnium, you can compare the effects of market volatilities on Neste Oyj and Plastic Omnium 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 Neste Oyj with a short position of Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Plastic Omnium.
Diversification Opportunities for Neste Oyj and Plastic Omnium
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neste and Plastic is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium and Neste 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 Neste Oyj are associated (or correlated) with Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of Neste Oyj i.e., Neste Oyj and Plastic Omnium go up and down completely randomly.
Pair Corralation between Neste Oyj and Plastic Omnium
Assuming the 90 days horizon Neste Oyj is expected to under-perform the Plastic Omnium. But the stock apears to be less risky and, when comparing its historical volatility, Neste Oyj is 1.49 times less risky than Plastic Omnium. The stock trades about -0.13 of its potential returns per unit of risk. The Plastic Omnium is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Plastic Omnium on November 4, 2024 and sell it today you would earn a total of 85.00 from holding Plastic Omnium or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oyj vs. Plastic Omnium
Performance |
| Timeline |
| Neste Oyj |
| Plastic Omnium |
Neste Oyj and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Plastic Omnium
The main advantage of trading using opposite Neste Oyj and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| Neste Oyj vs. bet at home AG | Neste Oyj vs. CENTURIA OFFICE REIT | Neste Oyj vs. ADDUS HOMECARE | Neste Oyj vs. Aedas Homes SA |
| Plastic Omnium vs. PATTIES FOODS | Plastic Omnium vs. Thai Beverage Public | Plastic Omnium vs. MONEYSUPERMARKET | Plastic Omnium vs. Moneysupermarket Group PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |