Correlation Between SSAB AB and UPM Kymmene
Can any of the company-specific risk be diversified away by investing in both SSAB AB and UPM Kymmene 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 UPM Kymmene 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 UPM Kymmene Oyj, you can compare the effects of market volatilities on SSAB AB and UPM Kymmene 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 UPM Kymmene. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and UPM Kymmene.
Diversification Opportunities for SSAB AB and UPM Kymmene
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SSAB and UPM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene 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 UPM Kymmene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of SSAB AB i.e., SSAB AB and UPM Kymmene go up and down completely randomly.
Pair Corralation between SSAB AB and UPM Kymmene
Assuming the 90 days trading horizon SSAB AB ser is expected to generate 1.53 times more return on investment than UPM Kymmene. However, SSAB AB is 1.53 times more volatile than UPM Kymmene Oyj. It trades about 0.01 of its potential returns per unit of risk. UPM Kymmene Oyj is currently generating about -0.02 per unit of risk. If you would invest 531.00 in SSAB AB ser on January 13, 2025 and sell it today you would lose (33.00) from holding SSAB AB ser or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSAB AB ser vs. UPM Kymmene Oyj
Performance |
| Timeline |
| SSAB AB ser |
| UPM Kymmene Oyj |
SSAB AB and UPM Kymmene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and UPM Kymmene
The main advantage of trading using opposite SSAB AB and UPM Kymmene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB position performs unexpectedly, UPM Kymmene 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 UPM Kymmene will offset losses from the drop in UPM Kymmene's long position.| SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Nordea Bank Abp | SSAB AB vs. Telia Company AB | SSAB AB vs. Wartsila Oyj Abp |
| UPM Kymmene vs. Sampo Oyj A | UPM Kymmene vs. Fortum Oyj | UPM Kymmene vs. Nordea Bank Abp | UPM Kymmene vs. Stora Enso 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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