Correlation Between Solteq PLC and Oriola KD
Can any of the company-specific risk be diversified away by investing in both Solteq PLC and Oriola KD 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 Solteq PLC and Oriola KD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solteq PLC and Oriola KD Oyj A, you can compare the effects of market volatilities on Solteq PLC and Oriola KD 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 Solteq PLC with a short position of Oriola KD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solteq PLC and Oriola KD.
Diversification Opportunities for Solteq PLC and Oriola KD
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solteq and Oriola is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Solteq PLC and Oriola KD Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola KD Oyj and Solteq PLC 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 Solteq PLC are associated (or correlated) with Oriola KD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola KD Oyj has no effect on the direction of Solteq PLC i.e., Solteq PLC and Oriola KD go up and down completely randomly.
Pair Corralation between Solteq PLC and Oriola KD
Assuming the 90 days trading horizon Solteq PLC is expected to under-perform the Oriola KD. In addition to that, Solteq PLC is 1.82 times more volatile than Oriola KD Oyj A. It trades about -0.04 of its total potential returns per unit of risk. Oriola KD Oyj A is currently generating about -0.06 per unit of volatility. If you would invest 167.00 in Oriola KD Oyj A on August 27, 2024 and sell it today you would lose (73.00) from holding Oriola KD Oyj A or give up 43.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solteq PLC vs. Oriola KD Oyj A
Performance |
| Timeline |
| Solteq PLC |
| Oriola KD Oyj |
Solteq PLC and Oriola KD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solteq PLC and Oriola KD
The main advantage of trading using opposite Solteq PLC and Oriola KD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solteq PLC position performs unexpectedly, Oriola KD 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 Oriola KD will offset losses from the drop in Oriola KD's long position.| Solteq PLC vs. Innofactor Oyj | Solteq PLC vs. CapMan Oyj B | Solteq PLC vs. HKFoods Oyj A | Solteq PLC vs. KONE Oyj |
| Oriola KD vs. Lassila Tikanoja Oyj | Oriola KD vs. Raisio Oyj Vaihto osake | Oriola KD vs. YIT Oyj | Oriola KD vs. Orion Oyj A |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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