Correlation Between Neste Oyj and Rubis
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Rubis 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 Rubis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Rubis, you can compare the effects of market volatilities on Neste Oyj and Rubis 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 Rubis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Rubis.
Diversification Opportunities for Neste Oyj and Rubis
Poor diversification
The 3 months correlation between Neste and Rubis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Rubis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis 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 Rubis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis has no effect on the direction of Neste Oyj i.e., Neste Oyj and Rubis go up and down completely randomly.
Pair Corralation between Neste Oyj and Rubis
If you would invest 760.00 in Neste Oyj on September 4, 2024 and sell it today you would lose (3.00) from holding Neste Oyj or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Neste Oyj vs. Rubis
Performance |
| Timeline |
| Neste Oyj |
| Rubis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Neste Oyj and Rubis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Rubis
The main advantage of trading using opposite Neste Oyj and Rubis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Rubis 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 Rubis will offset losses from the drop in Rubis' long position.| Neste Oyj vs. Icahn Enterprises LP | Neste Oyj vs. Star Gas Partners | Neste Oyj vs. Ultrapar Participacoes SA | Neste Oyj vs. Par Pacific Holdings |
| Rubis vs. DCC PLC ADR | Rubis vs. Ultrapar Participacoes SA | Rubis vs. Sunoco LP | Rubis vs. HF Sinclair Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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