Correlation Between Qt Group and Metsa Board
Can any of the company-specific risk be diversified away by investing in both Qt Group and Metsa Board 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 Qt Group and Metsa Board into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qt Group Oyj and Metsa Board Oyj, you can compare the effects of market volatilities on Qt Group and Metsa Board 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 Qt Group with a short position of Metsa Board. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qt Group and Metsa Board.
Diversification Opportunities for Qt Group and Metsa Board
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QTCOM and Metsa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Qt Group Oyj and Metsa Board Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metsa Board Oyj and Qt Group 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 Qt Group Oyj are associated (or correlated) with Metsa Board. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metsa Board Oyj has no effect on the direction of Qt Group i.e., Qt Group and Metsa Board go up and down completely randomly.
Pair Corralation between Qt Group and Metsa Board
Assuming the 90 days trading horizon Qt Group Oyj is expected to generate 1.06 times more return on investment than Metsa Board. However, Qt Group is 1.06 times more volatile than Metsa Board Oyj. It trades about -0.02 of its potential returns per unit of risk. Metsa Board Oyj is currently generating about -0.26 per unit of risk. If you would invest 6,925 in Qt Group Oyj on September 2, 2024 and sell it today you would lose (80.00) from holding Qt Group Oyj or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qt Group Oyj vs. Metsa Board Oyj
Performance |
| Timeline |
| Qt Group Oyj |
| Metsa Board Oyj |
Qt Group and Metsa Board Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qt Group and Metsa Board
The main advantage of trading using opposite Qt Group and Metsa Board positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qt Group position performs unexpectedly, Metsa Board 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 Metsa Board will offset losses from the drop in Metsa Board's long position.| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
| Metsa Board vs. UPM Kymmene Oyj | Metsa Board vs. Stora Enso Oyj | Metsa Board vs. Metsa Board Oyj | Metsa Board vs. Valmet Oyj |
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 CEOs Directory module to screen CEOs from public companies around the world.
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