Correlation Between Neste Oyj and Polski Koncern
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Polski Koncern 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 Polski Koncern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Polski Koncern Naftowy, you can compare the effects of market volatilities on Neste Oyj and Polski Koncern 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 Polski Koncern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Polski Koncern.
Diversification Opportunities for Neste Oyj and Polski Koncern
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neste and Polski is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Polski Koncern Naftowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polski Koncern Naftowy 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 Polski Koncern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polski Koncern Naftowy has no effect on the direction of Neste Oyj i.e., Neste Oyj and Polski Koncern go up and down completely randomly.
Pair Corralation between Neste Oyj and Polski Koncern
Assuming the 90 days horizon Neste Oyj is expected to under-perform the Polski Koncern. But the stock apears to be less risky and, when comparing its historical volatility, Neste Oyj is 1.21 times less risky than Polski Koncern. The stock trades about -0.06 of its potential returns per unit of risk. The Polski Koncern Naftowy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Polski Koncern Naftowy on September 3, 2024 and sell it today you would earn a total of 179.00 from holding Polski Koncern Naftowy or generate 17.43% 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. Polski Koncern Naftowy
Performance |
| Timeline |
| Neste Oyj |
| Polski Koncern Naftowy |
Neste Oyj and Polski Koncern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Polski Koncern
The main advantage of trading using opposite Neste Oyj and Polski Koncern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Polski Koncern 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 Polski Koncern will offset losses from the drop in Polski Koncern's long position.| Neste Oyj vs. PSI Software AG | Neste Oyj vs. AXWAY SOFTWARE EO | Neste Oyj vs. Guidewire Software | Neste Oyj vs. Axway Software SA |
| Polski Koncern vs. Marathon Petroleum Corp | Polski Koncern vs. Neste Oyj | Polski Koncern vs. ENEOS Holdings | Polski Koncern vs. PTT OILRETBUS FOR BA10 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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