Correlation Between SSAB AB and YIT Oyj
Can any of the company-specific risk be diversified away by investing in both SSAB AB and YIT 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 YIT 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 YIT Oyj, you can compare the effects of market volatilities on SSAB AB and YIT 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 YIT Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and YIT Oyj.
Diversification Opportunities for SSAB AB and YIT Oyj
Weak diversification
The 3 months correlation between SSAB and YIT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT 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 YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of SSAB AB i.e., SSAB AB and YIT Oyj go up and down completely randomly.
Pair Corralation between SSAB AB and YIT Oyj
Assuming the 90 days trading horizon SSAB AB ser is expected to generate 0.94 times more return on investment than YIT Oyj. However, SSAB AB ser is 1.06 times less risky than YIT Oyj. It trades about 0.02 of its potential returns per unit of risk. YIT Oyj is currently generating about 0.02 per unit of risk. If you would invest 416.00 in SSAB AB ser on September 12, 2024 and sell it today you would earn a total of 32.00 from holding SSAB AB ser or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSAB AB ser vs. YIT Oyj
Performance |
| Timeline |
| SSAB AB ser |
| YIT Oyj |
SSAB AB and YIT Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and YIT Oyj
The main advantage of trading using opposite SSAB AB and YIT Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB position performs unexpectedly, YIT 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 YIT Oyj will offset losses from the drop in YIT 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 |
| YIT Oyj vs. Telefonaktiebolaget LM Ericsson | YIT Oyj vs. KONE Oyj | YIT Oyj vs. Nordea Bank Abp | YIT Oyj vs. TietoEVRY Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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