Correlation Between Outokumpu Oyj and Ta Chen
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and Ta Chen 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 Ta Chen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj ADR and Ta Chen Stainless, you can compare the effects of market volatilities on Outokumpu Oyj and Ta Chen 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 Ta Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and Ta Chen.
Diversification Opportunities for Outokumpu Oyj and Ta Chen
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Outokumpu and 2027 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj ADR and Ta Chen Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Chen Stainless 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 ADR are associated (or correlated) with Ta Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Chen Stainless has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and Ta Chen go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and Ta Chen
Assuming the 90 days horizon Outokumpu Oyj ADR is expected to under-perform the Ta Chen. But the pink sheet apears to be less risky and, when comparing its historical volatility, Outokumpu Oyj ADR is 1.33 times less risky than Ta Chen. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Ta Chen Stainless is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 3,715 in Ta Chen Stainless on September 3, 2024 and sell it today you would lose (245.00) from holding Ta Chen Stainless or give up 6.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.65% |
| Values | Daily Returns |
Outokumpu Oyj ADR vs. Ta Chen Stainless
Performance |
| Timeline |
| Outokumpu Oyj ADR |
| Ta Chen Stainless |
Outokumpu Oyj and Ta Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and Ta Chen
The main advantage of trading using opposite Outokumpu Oyj and Ta Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, Ta Chen 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 Ta Chen will offset losses from the drop in Ta Chen's long position.| Outokumpu Oyj vs. Ta Chen Stainless | Outokumpu Oyj vs. Gerdau SA | Outokumpu Oyj vs. Gerdau SA | Outokumpu Oyj vs. Nucor Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |