Correlation Between Neste Oil and Qt Group
Can any of the company-specific risk be diversified away by investing in both Neste Oil and Qt Group 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 Qt Group 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 Qt Group Oyj, you can compare the effects of market volatilities on Neste Oil and Qt Group 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 Qt Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oil and Qt Group.
Diversification Opportunities for Neste Oil and Qt Group
Good diversification
The 3 months correlation between Neste and QTCOM is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oil Oyj and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group 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 Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Neste Oil i.e., Neste Oil and Qt Group go up and down completely randomly.
Pair Corralation between Neste Oil and Qt Group
Assuming the 90 days trading horizon Neste Oil Oyj is expected to under-perform the Qt Group. In addition to that, Neste Oil is 1.02 times more volatile than Qt Group Oyj. It trades about -0.03 of its total potential returns per unit of risk. Qt Group Oyj is currently generating about 0.24 per unit of volatility. If you would invest 7,020 in Qt Group Oyj on November 3, 2024 and sell it today you would earn a total of 865.00 from holding Qt Group Oyj or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Neste Oil Oyj vs. Qt Group Oyj
Performance |
| Timeline |
| Neste Oil Oyj |
| Qt Group Oyj |
Neste Oil and Qt Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oil and Qt Group
The main advantage of trading using opposite Neste Oil and Qt Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oil position performs unexpectedly, Qt Group 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 Qt Group will offset losses from the drop in Qt Group'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 |
| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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