Correlation Between Outokumpu Oyj and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and SSAB AB 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 SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj and SSAB AB ser, you can compare the effects of market volatilities on Outokumpu Oyj and SSAB AB 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 SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and SSAB AB.
Diversification Opportunities for Outokumpu Oyj and SSAB AB
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Outokumpu and SSAB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser 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 SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and SSAB AB go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and SSAB AB
Assuming the 90 days trading horizon Outokumpu Oyj is expected to under-perform the SSAB AB. But the stock apears to be less risky and, when comparing its historical volatility, Outokumpu Oyj is 1.65 times less risky than SSAB AB. The stock trades about -0.11 of its potential returns per unit of risk. The SSAB AB ser is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 451.00 in SSAB AB ser on August 30, 2024 and sell it today you would lose (13.00) from holding SSAB AB ser or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outokumpu Oyj vs. SSAB AB ser
Performance |
| Timeline |
| Outokumpu Oyj |
| SSAB AB ser |
Outokumpu Oyj and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and SSAB AB
The main advantage of trading using opposite Outokumpu Oyj and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB'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 |
| SSAB AB vs. SSAB AB ser | SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Metsa Board Oyj | SSAB AB vs. Telia Company AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |