Correlation Between Outokumpu Oyj and Dovre Group
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and Dovre 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 Outokumpu Oyj and Dovre Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj and Dovre Group Plc, you can compare the effects of market volatilities on Outokumpu Oyj and Dovre 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 Outokumpu Oyj with a short position of Dovre Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and Dovre Group.
Diversification Opportunities for Outokumpu Oyj and Dovre Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outokumpu and Dovre is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj and Dovre Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dovre Group Plc and Outokumpu 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 Outokumpu Oyj are associated (or correlated) with Dovre Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dovre Group Plc has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and Dovre Group go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and Dovre Group
Assuming the 90 days trading horizon Outokumpu Oyj is expected to under-perform the Dovre Group. But the stock apears to be less risky and, when comparing its historical volatility, Outokumpu Oyj is 1.58 times less risky than Dovre Group. The stock trades about -0.09 of its potential returns per unit of risk. The Dovre Group Plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Dovre Group Plc on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Dovre Group Plc or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outokumpu Oyj vs. Dovre Group Plc
Performance |
| Timeline |
| Outokumpu Oyj |
| Dovre Group Plc |
Outokumpu Oyj and Dovre Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and Dovre Group
The main advantage of trading using opposite Outokumpu Oyj and Dovre Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, Dovre 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 Dovre Group will offset losses from the drop in Dovre Group's long position.| Outokumpu Oyj vs. Nordea Bank Abp | Outokumpu Oyj vs. Fortum Oyj | Outokumpu Oyj vs. Wartsila Oyj Abp | Outokumpu Oyj vs. Sampo Oyj A |
| Dovre Group vs. Telefonaktiebolaget LM Ericsson | Dovre Group vs. Telia Company AB | Dovre Group vs. SSAB AB ser | Dovre Group vs. SSAB AB ser |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |