Correlation Between PunaMusta Media and Raute Oyj
Can any of the company-specific risk be diversified away by investing in both PunaMusta Media and Raute 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 PunaMusta Media and Raute Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PunaMusta Media Oyj and Raute Oyj, you can compare the effects of market volatilities on PunaMusta Media and Raute 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 PunaMusta Media with a short position of Raute Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of PunaMusta Media and Raute Oyj.
Diversification Opportunities for PunaMusta Media and Raute Oyj
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PunaMusta and Raute is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PunaMusta Media Oyj and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute Oyj and PunaMusta Media 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 PunaMusta Media Oyj are associated (or correlated) with Raute Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raute Oyj has no effect on the direction of PunaMusta Media i.e., PunaMusta Media and Raute Oyj go up and down completely randomly.
Pair Corralation between PunaMusta Media and Raute Oyj
Assuming the 90 days trading horizon PunaMusta Media Oyj is expected to under-perform the Raute Oyj. But the stock apears to be less risky and, when comparing its historical volatility, PunaMusta Media Oyj is 1.87 times less risky than Raute Oyj. The stock trades about -0.58 of its potential returns per unit of risk. The Raute Oyj is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,285 in Raute Oyj on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Raute Oyj or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 14.29% |
| Values | Daily Returns |
PunaMusta Media Oyj vs. Raute Oyj
Performance |
| Timeline |
| PunaMusta Media Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Raute Oyj |
PunaMusta Media and Raute Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PunaMusta Media and Raute Oyj
The main advantage of trading using opposite PunaMusta Media and Raute Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PunaMusta Media position performs unexpectedly, Raute 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 Raute Oyj will offset losses from the drop in Raute Oyj's long position.| PunaMusta Media vs. Raute Oyj | PunaMusta Media vs. Suominen Oyj | PunaMusta Media vs. Elecster Oyj A | PunaMusta Media vs. Siili Solutions Oyj |
| Raute Oyj vs. Ponsse Oyj 1 | Raute Oyj vs. Lassila Tikanoja Oyj | Raute Oyj vs. Tokmanni Group Oyj | Raute Oyj vs. CapMan Oyj B |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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