Correlation Between Revenio and Etteplan Oyj
Can any of the company-specific risk be diversified away by investing in both Revenio and Etteplan 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 Revenio and Etteplan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revenio Group and Etteplan Oyj, you can compare the effects of market volatilities on Revenio and Etteplan 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 Revenio with a short position of Etteplan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revenio and Etteplan Oyj.
Diversification Opportunities for Revenio and Etteplan Oyj
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Revenio and Etteplan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Revenio Group and Etteplan Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etteplan Oyj and Revenio 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 Revenio Group are associated (or correlated) with Etteplan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etteplan Oyj has no effect on the direction of Revenio i.e., Revenio and Etteplan Oyj go up and down completely randomly.
Pair Corralation between Revenio and Etteplan Oyj
Assuming the 90 days trading horizon Revenio Group is expected to under-perform the Etteplan Oyj. In addition to that, Revenio is 1.32 times more volatile than Etteplan Oyj. It trades about -0.28 of its total potential returns per unit of risk. Etteplan Oyj is currently generating about 0.08 per unit of volatility. If you would invest 1,085 in Etteplan Oyj on November 28, 2024 and sell it today you would earn a total of 25.00 from holding Etteplan Oyj or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revenio Group vs. Etteplan Oyj
Performance |
| Timeline |
| Revenio Group |
| Etteplan Oyj |
Revenio and Etteplan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revenio and Etteplan Oyj
The main advantage of trading using opposite Revenio and Etteplan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revenio position performs unexpectedly, Etteplan 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 Etteplan Oyj will offset losses from the drop in Etteplan Oyj's long position.The idea behind Revenio Group and Etteplan Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Etteplan Oyj vs. Tokmanni Group Oyj | Etteplan Oyj vs. Konecranes Plc | Etteplan Oyj vs. Lassila Tikanoja Oyj | Etteplan Oyj vs. Metsa Board 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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