Correlation Between Outokumpu Oyj and YIT Oyj
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and YIT Oyj 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 YIT Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj and YIT Oyj, you can compare the effects of market volatilities on Outokumpu Oyj and YIT Oyj 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 YIT Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and YIT Oyj.
Diversification Opportunities for Outokumpu Oyj and YIT Oyj
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Outokumpu and YIT is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT Oyj 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 YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and YIT Oyj go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and YIT Oyj
If you would invest 281.00 in Outokumpu Oyj on October 22, 2024 and sell it today you would earn a total of 18.00 from holding Outokumpu Oyj or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 6.25% |
| Values | Daily Returns |
Outokumpu Oyj vs. YIT Oyj
Performance |
| Timeline |
| Outokumpu Oyj |
| YIT Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Outokumpu Oyj and YIT Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and YIT Oyj
The main advantage of trading using opposite Outokumpu Oyj and YIT Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, YIT Oyj 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 YIT Oyj will offset losses from the drop in YIT Oyj'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 |
| YIT Oyj vs. Outokumpu Oyj | YIT Oyj vs. Wartsila Oyj Abp | YIT Oyj vs. Telia Company AB | YIT Oyj vs. Konecranes Plc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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