Correlation Between SSAB AB and Etteplan Oyj
Can any of the company-specific risk be diversified away by investing in both SSAB AB and Etteplan 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 SSAB AB and Etteplan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSAB AB ser and Etteplan Oyj, you can compare the effects of market volatilities on SSAB AB and Etteplan 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 SSAB AB with a short position of Etteplan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and Etteplan Oyj.
Diversification Opportunities for SSAB AB and Etteplan Oyj
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSAB and Etteplan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and Etteplan Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etteplan Oyj and SSAB AB 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 SSAB AB ser are associated (or correlated) with Etteplan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etteplan Oyj has no effect on the direction of SSAB AB i.e., SSAB AB and Etteplan Oyj go up and down completely randomly.
Pair Corralation between SSAB AB and Etteplan Oyj
Assuming the 90 days trading horizon SSAB AB ser is expected to generate 1.29 times more return on investment than Etteplan Oyj. However, SSAB AB is 1.29 times more volatile than Etteplan Oyj. It trades about 0.01 of its potential returns per unit of risk. Etteplan Oyj is currently generating about -0.02 per unit of risk. If you would invest 476.00 in SSAB AB ser on August 30, 2024 and sell it today you would lose (27.00) from holding SSAB AB ser or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SSAB AB ser vs. Etteplan Oyj
Performance |
| Timeline |
| SSAB AB ser |
| Etteplan Oyj |
SSAB AB and Etteplan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and Etteplan Oyj
The main advantage of trading using opposite SSAB AB and Etteplan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB position performs unexpectedly, Etteplan 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 Etteplan Oyj will offset losses from the drop in Etteplan Oyj's long position.| SSAB AB vs. SSAB AB ser | SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Metsa Board Oyj | SSAB AB vs. Telia Company AB |
| Etteplan Oyj vs. Telefonaktiebolaget LM Ericsson | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. Telia Company AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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