Correlation Between Sitowise Group and EcoUp Oyj
Can any of the company-specific risk be diversified away by investing in both Sitowise Group and EcoUp 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 Sitowise Group and EcoUp Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitowise Group Oyj and EcoUp Oyj, you can compare the effects of market volatilities on Sitowise Group and EcoUp 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 Sitowise Group with a short position of EcoUp Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitowise Group and EcoUp Oyj.
Diversification Opportunities for Sitowise Group and EcoUp Oyj
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitowise and EcoUp is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sitowise Group Oyj and EcoUp Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoUp Oyj and Sitowise 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 Sitowise Group Oyj are associated (or correlated) with EcoUp Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoUp Oyj has no effect on the direction of Sitowise Group i.e., Sitowise Group and EcoUp Oyj go up and down completely randomly.
Pair Corralation between Sitowise Group and EcoUp Oyj
Assuming the 90 days trading horizon Sitowise Group Oyj is expected to generate 1.11 times more return on investment than EcoUp Oyj. However, Sitowise Group is 1.11 times more volatile than EcoUp Oyj. It trades about 0.06 of its potential returns per unit of risk. EcoUp Oyj is currently generating about -0.22 per unit of risk. If you would invest 266.00 in Sitowise Group Oyj on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Sitowise Group Oyj or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitowise Group Oyj vs. EcoUp Oyj
Performance |
| Timeline |
| Sitowise Group Oyj |
| EcoUp Oyj |
Sitowise Group and EcoUp Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitowise Group and EcoUp Oyj
The main advantage of trading using opposite Sitowise Group and EcoUp Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitowise Group position performs unexpectedly, EcoUp 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 EcoUp Oyj will offset losses from the drop in EcoUp Oyj's long position.| Sitowise Group vs. TietoEVRY Corp | Sitowise Group vs. Tokmanni Group Oyj | Sitowise Group vs. Harvia Oyj | Sitowise Group vs. Puuilo Oyj |
| EcoUp Oyj vs. Kamux Suomi Oy | EcoUp Oyj vs. Harvia Oyj | EcoUp Oyj vs. Qt Group Oyj | EcoUp Oyj vs. Tecnotree 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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