Correlation Between Oma Saastopankki and Solteq PLC
Can any of the company-specific risk be diversified away by investing in both Oma Saastopankki and Solteq PLC 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 Oma Saastopankki and Solteq PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oma Saastopankki Oyj and Solteq PLC, you can compare the effects of market volatilities on Oma Saastopankki and Solteq PLC 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 Oma Saastopankki with a short position of Solteq PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oma Saastopankki and Solteq PLC.
Diversification Opportunities for Oma Saastopankki and Solteq PLC
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oma and Solteq is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oma Saastopankki Oyj and Solteq PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solteq PLC and Oma Saastopankki 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 Oma Saastopankki Oyj are associated (or correlated) with Solteq PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solteq PLC has no effect on the direction of Oma Saastopankki i.e., Oma Saastopankki and Solteq PLC go up and down completely randomly.
Pair Corralation between Oma Saastopankki and Solteq PLC
Assuming the 90 days trading horizon Oma Saastopankki Oyj is expected to generate 0.84 times more return on investment than Solteq PLC. However, Oma Saastopankki Oyj is 1.19 times less risky than Solteq PLC. It trades about -0.1 of its potential returns per unit of risk. Solteq PLC is currently generating about -0.13 per unit of risk. If you would invest 1,164 in Oma Saastopankki Oyj on August 30, 2024 and sell it today you would lose (82.00) from holding Oma Saastopankki Oyj or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Oma Saastopankki Oyj vs. Solteq PLC
Performance |
| Timeline |
| Oma Saastopankki Oyj |
| Solteq PLC |
Oma Saastopankki and Solteq PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oma Saastopankki and Solteq PLC
The main advantage of trading using opposite Oma Saastopankki and Solteq PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oma Saastopankki position performs unexpectedly, Solteq PLC 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 Solteq PLC will offset losses from the drop in Solteq PLC's long position.| Oma Saastopankki vs. Kamux Suomi Oy | Oma Saastopankki vs. Harvia Oyj | Oma Saastopankki vs. TietoEVRY Corp | Oma Saastopankki vs. Tokmanni Group Oyj |
| Solteq PLC vs. Tecnotree Oyj | Solteq PLC vs. Harvia Oyj | Solteq PLC vs. Kamux Suomi Oy | Solteq PLC vs. Qt Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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