Correlation Between Raute Oyj and Exel Composites
Can any of the company-specific risk be diversified away by investing in both Raute Oyj and Exel Composites 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 Raute Oyj and Exel Composites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raute Oyj and Exel Composites Oyj, you can compare the effects of market volatilities on Raute Oyj and Exel Composites 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 Raute Oyj with a short position of Exel Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raute Oyj and Exel Composites.
Diversification Opportunities for Raute Oyj and Exel Composites
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raute and Exel is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Raute Oyj and Exel Composites Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Composites Oyj and Raute Oyj 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 Raute Oyj are associated (or correlated) with Exel Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Composites Oyj has no effect on the direction of Raute Oyj i.e., Raute Oyj and Exel Composites go up and down completely randomly.
Pair Corralation between Raute Oyj and Exel Composites
Assuming the 90 days trading horizon Raute Oyj is expected to generate 0.79 times more return on investment than Exel Composites. However, Raute Oyj is 1.27 times less risky than Exel Composites. It trades about 0.06 of its potential returns per unit of risk. Exel Composites Oyj is currently generating about 0.01 per unit of risk. If you would invest 1,115 in Raute Oyj on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Raute Oyj or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raute Oyj vs. Exel Composites Oyj
Performance |
| Timeline |
| Raute Oyj |
| Exel Composites Oyj |
Raute Oyj and Exel Composites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raute Oyj and Exel Composites
The main advantage of trading using opposite Raute Oyj and Exel Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raute Oyj position performs unexpectedly, Exel Composites 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 Exel Composites will offset losses from the drop in Exel Composites' long position.| Raute Oyj vs. Ponsse Oyj 1 | Raute Oyj vs. Lassila Tikanoja Oyj | Raute Oyj vs. Tokmanni Group Oyj | Raute Oyj vs. CapMan Oyj B |
| Exel Composites vs. SSH Communications Security | Exel Composites vs. Reka Industrial Oyj | Exel Composites vs. Alandsbanken Abp A | Exel Composites vs. Sotkamo Silver AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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