Correlation Between STORE ELECTRONIC and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and NESTE 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 STORE ELECTRONIC and NESTE OYJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and NESTE OYJ UNSPADR, you can compare the effects of market volatilities on STORE ELECTRONIC and NESTE 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 STORE ELECTRONIC with a short position of NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and NESTE OYJ.
Diversification Opportunities for STORE ELECTRONIC and NESTE OYJ
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between STORE and NESTE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and NESTE OYJ go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and NESTE OYJ
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.03 times more return on investment than NESTE OYJ. However, STORE ELECTRONIC is 1.03 times more volatile than NESTE OYJ UNSPADR. It trades about 0.06 of its potential returns per unit of risk. NESTE OYJ UNSPADR is currently generating about -0.12 per unit of risk. If you would invest 12,571 in STORE ELECTRONIC on September 30, 2024 and sell it today you would earn a total of 4,829 from holding STORE ELECTRONIC or generate 38.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. NESTE OYJ UNSPADR
Performance |
| Timeline |
| STORE ELECTRONIC |
| NESTE OYJ UNSPADR |
STORE ELECTRONIC and NESTE OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and NESTE OYJ
The main advantage of trading using opposite STORE ELECTRONIC and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, NESTE 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.| STORE ELECTRONIC vs. GOLD ROAD RES | STORE ELECTRONIC vs. BII Railway Transportation | STORE ELECTRONIC vs. Gaztransport Technigaz SA | STORE ELECTRONIC vs. QUEEN S ROAD |
| NESTE OYJ vs. Reliance Industries Limited | NESTE OYJ vs. Marathon Petroleum Corp | NESTE OYJ vs. Valero Energy | NESTE OYJ vs. Polski Koncern Naftowy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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