Correlation Between Sappi and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Sappi and Stora Enso 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 Sappi and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sappi Ltd ADR and Stora Enso Oyj, you can compare the effects of market volatilities on Sappi and Stora Enso 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 Sappi with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sappi and Stora Enso.
Diversification Opportunities for Sappi and Stora Enso
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sappi and Stora is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sappi Ltd ADR and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Sappi 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 Sappi Ltd ADR are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Sappi i.e., Sappi and Stora Enso go up and down completely randomly.
Pair Corralation between Sappi and Stora Enso
If you would invest 1,120 in Stora Enso Oyj on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Stora Enso Oyj or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sappi Ltd ADR vs. Stora Enso Oyj
Performance |
| Timeline |
| Sappi Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sappi and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sappi and Stora Enso
The main advantage of trading using opposite Sappi and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sappi position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Sappi vs. Nine Dragons Paper | Sappi vs. Nine Dragons Paper | Sappi vs. Mondi PLC ADR | Sappi vs. Klabin Sa A |
| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater Paper |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |