Correlation Between SSH Communications and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both SSH Communications and Fortum 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 SSH Communications and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSH Communications Security and Fortum Oyj, you can compare the effects of market volatilities on SSH Communications and Fortum 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 SSH Communications with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Fortum Oyj.
Diversification Opportunities for SSH Communications and Fortum Oyj
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SSH and Fortum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and SSH Communications 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 SSH Communications Security are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Fortum Oyj go up and down completely randomly.
Pair Corralation between SSH Communications and Fortum Oyj
Assuming the 90 days trading horizon SSH Communications Security is expected to under-perform the Fortum Oyj. In addition to that, SSH Communications is 1.9 times more volatile than Fortum Oyj. It trades about -0.17 of its total potential returns per unit of risk. Fortum Oyj is currently generating about 0.0 per unit of volatility. If you would invest 1,423 in Fortum Oyj on August 29, 2024 and sell it today you would lose (5.00) from holding Fortum Oyj or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. Fortum Oyj
Performance |
| Timeline |
| SSH Communications |
| Fortum Oyj |
SSH Communications and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and Fortum Oyj
The main advantage of trading using opposite SSH Communications and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications position performs unexpectedly, Fortum 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia Oyj |
| Fortum Oyj vs. Detection Technology OY | Fortum Oyj vs. SSH Communications Security | Fortum Oyj vs. HKFoods Oyj A | Fortum Oyj vs. QPR Software 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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