Correlation Between Neste Oil and Aiforia Technologies
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By analyzing existing cross correlation between Neste Oil Oyj and Aiforia Technologies Oyj, you can compare the effects of market volatilities on Neste Oil and Aiforia Technologies 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 Oil with a short position of Aiforia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oil and Aiforia Technologies.
Diversification Opportunities for Neste Oil and Aiforia Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Neste and Aiforia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oil Oyj and Aiforia Technologies Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aiforia Technologies Oyj and Neste Oil 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 Oil Oyj are associated (or correlated) with Aiforia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aiforia Technologies Oyj has no effect on the direction of Neste Oil i.e., Neste Oil and Aiforia Technologies go up and down completely randomly.
Pair Corralation between Neste Oil and Aiforia Technologies
Assuming the 90 days trading horizon Neste Oil Oyj is expected to under-perform the Aiforia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Neste Oil Oyj is 1.09 times less risky than Aiforia Technologies. The stock trades about -0.08 of its potential returns per unit of risk. The Aiforia Technologies Oyj is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Aiforia Technologies Oyj on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Aiforia Technologies Oyj or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oil Oyj vs. Aiforia Technologies Oyj
Performance |
| Timeline |
| Neste Oil Oyj |
| Aiforia Technologies Oyj |
Neste Oil and Aiforia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oil and Aiforia Technologies
The main advantage of trading using opposite Neste Oil and Aiforia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oil position performs unexpectedly, Aiforia Technologies 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 Aiforia Technologies will offset losses from the drop in Aiforia Technologies' long position.| Neste Oil vs. Fortum Oyj | Neste Oil vs. Sampo Oyj A | Neste Oil vs. Nordea Bank Abp | Neste Oil vs. UPM Kymmene Oyj |
| Aiforia Technologies vs. Nordea Bank Abp | Aiforia Technologies vs. Neste Oil Oyj | Aiforia Technologies vs. KONE Oyj | Aiforia Technologies vs. Nokia 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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