Correlation Between PunaMusta Media and Suominen Oyj
Can any of the company-specific risk be diversified away by investing in both PunaMusta Media and Suominen 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 Suominen 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 Suominen Oyj, you can compare the effects of market volatilities on PunaMusta Media and Suominen 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 Suominen Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of PunaMusta Media and Suominen Oyj.
Diversification Opportunities for PunaMusta Media and Suominen Oyj
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PunaMusta and Suominen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PunaMusta Media Oyj and Suominen Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suominen 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 Suominen Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suominen Oyj has no effect on the direction of PunaMusta Media i.e., PunaMusta Media and Suominen Oyj go up and down completely randomly.
Pair Corralation between PunaMusta Media and Suominen Oyj
Assuming the 90 days trading horizon PunaMusta Media Oyj is expected to under-perform the Suominen Oyj. In addition to that, PunaMusta Media is 1.09 times more volatile than Suominen Oyj. It trades about -0.15 of its total potential returns per unit of risk. Suominen Oyj is currently generating about -0.04 per unit of volatility. If you would invest 263.00 in Suominen Oyj on September 4, 2024 and sell it today you would lose (53.00) from holding Suominen Oyj or give up 20.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.37% |
| Values | Daily Returns |
PunaMusta Media Oyj vs. Suominen Oyj
Performance |
| Timeline |
| PunaMusta Media Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Suominen Oyj |
PunaMusta Media and Suominen Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PunaMusta Media and Suominen Oyj
The main advantage of trading using opposite PunaMusta Media and Suominen Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PunaMusta Media position performs unexpectedly, Suominen 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 Suominen Oyj will offset losses from the drop in Suominen Oyj's long position.| PunaMusta Media vs. Tokmanni Group Oyj | PunaMusta Media vs. Kemira Oyj | PunaMusta Media vs. Elisa Oyj | PunaMusta Media vs. Valmet Oyj |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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