Correlation Between Polight ASA and TietoEVRY Oyj
Can any of the company-specific risk be diversified away by investing in both Polight ASA and TietoEVRY 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 Polight ASA and TietoEVRY Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polight ASA and TietoEVRY Oyj, you can compare the effects of market volatilities on Polight ASA and TietoEVRY 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 Polight ASA with a short position of TietoEVRY Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polight ASA and TietoEVRY Oyj.
Diversification Opportunities for Polight ASA and TietoEVRY Oyj
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Polight and TietoEVRY is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Polight ASA and TietoEVRY Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Oyj and Polight ASA 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 Polight ASA are associated (or correlated) with TietoEVRY Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Oyj has no effect on the direction of Polight ASA i.e., Polight ASA and TietoEVRY Oyj go up and down completely randomly.
Pair Corralation between Polight ASA and TietoEVRY Oyj
Assuming the 90 days trading horizon Polight ASA is expected to generate 4.42 times more return on investment than TietoEVRY Oyj. However, Polight ASA is 4.42 times more volatile than TietoEVRY Oyj. It trades about 0.29 of its potential returns per unit of risk. TietoEVRY Oyj is currently generating about 0.08 per unit of risk. If you would invest 406.00 in Polight ASA on September 15, 2024 and sell it today you would earn a total of 124.00 from holding Polight ASA or generate 30.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polight ASA vs. TietoEVRY Oyj
Performance |
| Timeline |
| Polight ASA |
| TietoEVRY Oyj |
Polight ASA and TietoEVRY Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polight ASA and TietoEVRY Oyj
The main advantage of trading using opposite Polight ASA and TietoEVRY Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polight ASA position performs unexpectedly, TietoEVRY 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 TietoEVRY Oyj will offset losses from the drop in TietoEVRY Oyj's long position.| Polight ASA vs. Elliptic Laboratories AS | Polight ASA vs. Kongsberg Automotive Holding | Polight ASA vs. REC Silicon ASA |
| TietoEVRY Oyj vs. Huddlestock Fintech As | TietoEVRY Oyj vs. Xplora Technologies As | TietoEVRY Oyj vs. Polight ASA | TietoEVRY Oyj vs. Kongsberg Gruppen ASA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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