Correlation Between Wayside Technology and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Wayside Technology and Stora Enso 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 Wayside Technology and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and Stora Enso Oyj, you can compare the effects of market volatilities on Wayside Technology and Stora Enso 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 Wayside Technology with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and Stora Enso.
Diversification Opportunities for Wayside Technology and Stora Enso
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wayside and Stora is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Wayside Technology 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 Wayside Technology Group are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Wayside Technology i.e., Wayside Technology and Stora Enso go up and down completely randomly.
Pair Corralation between Wayside Technology and Stora Enso
Assuming the 90 days horizon Wayside Technology Group is expected to generate 1.52 times more return on investment than Stora Enso. However, Wayside Technology is 1.52 times more volatile than Stora Enso Oyj. It trades about 0.11 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.03 per unit of risk. If you would invest 2,985 in Wayside Technology Group on September 2, 2024 and sell it today you would earn a total of 9,615 from holding Wayside Technology Group or generate 322.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayside Technology Group vs. Stora Enso Oyj
Performance |
| Timeline |
| Wayside Technology |
| Stora Enso Oyj |
Wayside Technology and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and Stora Enso
The main advantage of trading using opposite Wayside Technology and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Wayside Technology vs. DATANG INTL POW | Wayside Technology vs. DOCDATA | Wayside Technology vs. TELES Informationstechnologien AG | Wayside Technology vs. Automatic Data Processing |
| Stora Enso vs. DXC Technology Co | Stora Enso vs. ONWARD MEDICAL BV | Stora Enso vs. X FAB Silicon Foundries | Stora Enso vs. Wayside Technology Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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