Correlation Between Stora Enso and Croda International
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Croda International 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 Stora Enso and Croda International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Croda International PLC, you can compare the effects of market volatilities on Stora Enso and Croda International 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 Stora Enso with a short position of Croda International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Croda International.
Diversification Opportunities for Stora Enso and Croda International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stora and Croda is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Croda International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croda International PLC and Stora Enso 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 Stora Enso Oyj are associated (or correlated) with Croda International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croda International PLC has no effect on the direction of Stora Enso i.e., Stora Enso and Croda International go up and down completely randomly.
Pair Corralation between Stora Enso and Croda International
If you would invest (100.00) in Stora Enso Oyj on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Stora Enso Oyj or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. Croda International PLC
Performance |
| Timeline |
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Croda International PLC |
Stora Enso and Croda International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Croda International
The main advantage of trading using opposite Stora Enso and Croda International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Croda International 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 Croda International will offset losses from the drop in Croda International's long position.| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater Paper |
| Croda International vs. Sherwin Williams Co | Croda International vs. Air Liquide SA | Croda International vs. LAir Liquide SA | Croda International vs. Air Products and |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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