Correlation Between Neste Oil and CapMan Oyj
Can any of the company-specific risk be diversified away by investing in both Neste Oil and CapMan Oyj 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 Oil and CapMan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oil Oyj and CapMan Oyj B, you can compare the effects of market volatilities on Neste Oil and CapMan Oyj 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 CapMan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oil and CapMan Oyj.
Diversification Opportunities for Neste Oil and CapMan Oyj
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neste and CapMan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oil Oyj and CapMan Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapMan Oyj B 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 CapMan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapMan Oyj B has no effect on the direction of Neste Oil i.e., Neste Oil and CapMan Oyj go up and down completely randomly.
Pair Corralation between Neste Oil and CapMan Oyj
Assuming the 90 days trading horizon Neste Oil Oyj is expected to under-perform the CapMan Oyj. In addition to that, Neste Oil is 2.26 times more volatile than CapMan Oyj B. It trades about -0.08 of its total potential returns per unit of risk. CapMan Oyj B is currently generating about -0.15 per unit of volatility. If you would invest 183.00 in CapMan Oyj B on August 28, 2024 and sell it today you would lose (7.00) from holding CapMan Oyj B or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oil Oyj vs. CapMan Oyj B
Performance |
| Timeline |
| Neste Oil Oyj |
| CapMan Oyj B |
Neste Oil and CapMan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oil and CapMan Oyj
The main advantage of trading using opposite Neste Oil and CapMan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oil position performs unexpectedly, CapMan Oyj 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 CapMan Oyj will offset losses from the drop in CapMan Oyj's 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 |
| CapMan Oyj vs. Nordea Bank Abp | CapMan Oyj vs. Fortum Oyj | CapMan Oyj vs. UPM Kymmene Oyj | CapMan Oyj vs. Neste Oil 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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