Correlation Between Optomed PLC and Metsa Board
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By analyzing existing cross correlation between Optomed PLC and Metsa Board Oyj, you can compare the effects of market volatilities on Optomed PLC and Metsa Board 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 Optomed PLC with a short position of Metsa Board. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optomed PLC and Metsa Board.
Diversification Opportunities for Optomed PLC and Metsa Board
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Optomed and Metsa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Optomed PLC and Metsa Board Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metsa Board Oyj and Optomed PLC 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 Optomed PLC are associated (or correlated) with Metsa Board. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metsa Board Oyj has no effect on the direction of Optomed PLC i.e., Optomed PLC and Metsa Board go up and down completely randomly.
Pair Corralation between Optomed PLC and Metsa Board
Assuming the 90 days trading horizon Optomed PLC is expected to generate 2.01 times more return on investment than Metsa Board. However, Optomed PLC is 2.01 times more volatile than Metsa Board Oyj. It trades about -0.07 of its potential returns per unit of risk. Metsa Board Oyj is currently generating about -0.26 per unit of risk. If you would invest 689.00 in Optomed PLC on August 31, 2024 and sell it today you would lose (231.00) from holding Optomed PLC or give up 33.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optomed PLC vs. Metsa Board Oyj
Performance |
| Timeline |
| Optomed PLC |
| Metsa Board Oyj |
Optomed PLC and Metsa Board Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optomed PLC and Metsa Board
The main advantage of trading using opposite Optomed PLC and Metsa Board positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optomed PLC position performs unexpectedly, Metsa Board 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 Metsa Board will offset losses from the drop in Metsa Board's long position.| Optomed PLC vs. Harvia Oyj | Optomed PLC vs. Revenio Group | Optomed PLC vs. Qt Group Oyj | Optomed PLC vs. Tecnotree Oyj |
| Metsa Board vs. Sampo Oyj A | Metsa Board vs. Fortum Oyj | Metsa Board vs. Nordea Bank Abp | Metsa Board vs. Stora Enso 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 CEOs Directory module to screen CEOs from public companies around the world.
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