Correlation Between Sotkamo Silver and Exel Composites
Can any of the company-specific risk be diversified away by investing in both Sotkamo Silver and Exel Composites 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 Sotkamo Silver and Exel Composites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotkamo Silver AB and Exel Composites Oyj, you can compare the effects of market volatilities on Sotkamo Silver and Exel Composites 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 Sotkamo Silver with a short position of Exel Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotkamo Silver and Exel Composites.
Diversification Opportunities for Sotkamo Silver and Exel Composites
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sotkamo and Exel is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sotkamo Silver AB and Exel Composites Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Composites Oyj and Sotkamo Silver 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 Sotkamo Silver AB are associated (or correlated) with Exel Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Composites Oyj has no effect on the direction of Sotkamo Silver i.e., Sotkamo Silver and Exel Composites go up and down completely randomly.
Pair Corralation between Sotkamo Silver and Exel Composites
Assuming the 90 days trading horizon Sotkamo Silver AB is expected to under-perform the Exel Composites. In addition to that, Sotkamo Silver is 1.26 times more volatile than Exel Composites Oyj. It trades about -0.1 of its total potential returns per unit of risk. Exel Composites Oyj is currently generating about -0.03 per unit of volatility. If you would invest 32.00 in Exel Composites Oyj on September 4, 2024 and sell it today you would lose (1.00) from holding Exel Composites Oyj or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sotkamo Silver AB vs. Exel Composites Oyj
Performance |
| Timeline |
| Sotkamo Silver AB |
| Exel Composites Oyj |
Sotkamo Silver and Exel Composites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotkamo Silver and Exel Composites
The main advantage of trading using opposite Sotkamo Silver and Exel Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotkamo Silver position performs unexpectedly, Exel Composites 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 Exel Composites will offset losses from the drop in Exel Composites' long position.| Sotkamo Silver vs. Outokumpu Oyj | Sotkamo Silver vs. Finnair Oyj | Sotkamo Silver vs. SSAB AB ser | Sotkamo Silver vs. Telia Company AB |
| Exel Composites vs. SSH Communications Security | Exel Composites vs. QPR Software Oyj | Exel Composites vs. Aiforia Technologies Oyj | Exel Composites vs. Remedy Entertainment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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