Correlation Between Neste Oil and Siili Solutions
Can any of the company-specific risk be diversified away by investing in both Neste Oil and Siili Solutions 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 Siili Solutions 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 Siili Solutions Oyj, you can compare the effects of market volatilities on Neste Oil and Siili Solutions 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 Siili Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oil and Siili Solutions.
Diversification Opportunities for Neste Oil and Siili Solutions
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Neste and Siili is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oil Oyj and Siili Solutions Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siili Solutions 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 Siili Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siili Solutions Oyj has no effect on the direction of Neste Oil i.e., Neste Oil and Siili Solutions go up and down completely randomly.
Pair Corralation between Neste Oil and Siili Solutions
Assuming the 90 days trading horizon Neste Oil Oyj is expected to under-perform the Siili Solutions. In addition to that, Neste Oil is 1.12 times more volatile than Siili Solutions Oyj. It trades about -0.09 of its total potential returns per unit of risk. Siili Solutions Oyj is currently generating about -0.07 per unit of volatility. If you would invest 628.00 in Siili Solutions Oyj on August 29, 2024 and sell it today you would lose (24.00) from holding Siili Solutions Oyj or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neste Oil Oyj vs. Siili Solutions Oyj
Performance |
| Timeline |
| Neste Oil Oyj |
| Siili Solutions Oyj |
Neste Oil and Siili Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oil and Siili Solutions
The main advantage of trading using opposite Neste Oil and Siili Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oil position performs unexpectedly, Siili Solutions 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 Siili Solutions will offset losses from the drop in Siili Solutions' 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 |
| Siili Solutions vs. Qt Group Oyj | Siili Solutions vs. Revenio Group | Siili Solutions vs. Kamux Suomi Oy | Siili Solutions vs. Harvia 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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