Correlation Between SSAB AB and Ponsse Oyj
Can any of the company-specific risk be diversified away by investing in both SSAB AB and Ponsse 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 Ponsse 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 Ponsse Oyj 1, you can compare the effects of market volatilities on SSAB AB and Ponsse 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 Ponsse Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and Ponsse Oyj.
Diversification Opportunities for SSAB AB and Ponsse Oyj
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SSAB and Ponsse is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and Ponsse Oyj 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ponsse Oyj 1 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 Ponsse Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ponsse Oyj 1 has no effect on the direction of SSAB AB i.e., SSAB AB and Ponsse Oyj go up and down completely randomly.
Pair Corralation between SSAB AB and Ponsse Oyj
Assuming the 90 days trading horizon SSAB AB ser is expected to generate 1.26 times more return on investment than Ponsse Oyj. However, SSAB AB is 1.26 times more volatile than Ponsse Oyj 1. It trades about 0.0 of its potential returns per unit of risk. Ponsse Oyj 1 is currently generating about -0.01 per unit of risk. If you would invest 477.00 in SSAB AB ser on September 3, 2024 and sell it today you would lose (41.00) from holding SSAB AB ser or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSAB AB ser vs. Ponsse Oyj 1
Performance |
| Timeline |
| SSAB AB ser |
| Ponsse Oyj 1 |
SSAB AB and Ponsse Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and Ponsse Oyj
The main advantage of trading using opposite SSAB AB and Ponsse Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB position performs unexpectedly, Ponsse 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 Ponsse Oyj will offset losses from the drop in Ponsse 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 |
| Ponsse Oyj vs. Telefonaktiebolaget LM Ericsson | Ponsse Oyj vs. Telia Company AB | Ponsse Oyj vs. SSAB AB ser | Ponsse Oyj vs. SSAB AB ser |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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