Correlation Between SSH Communications and Purmo Group
Can any of the company-specific risk be diversified away by investing in both SSH Communications and Purmo Group 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 Purmo Group 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 Purmo Group Oyj, you can compare the effects of market volatilities on SSH Communications and Purmo Group 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 Purmo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Purmo Group.
Diversification Opportunities for SSH Communications and Purmo Group
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SSH and Purmo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Purmo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purmo Group 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 Purmo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purmo Group Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Purmo Group go up and down completely randomly.
Pair Corralation between SSH Communications and Purmo Group
Assuming the 90 days trading horizon SSH Communications Security is expected to under-perform the Purmo Group. In addition to that, SSH Communications is 1.44 times more volatile than Purmo Group Oyj. It trades about -0.02 of its total potential returns per unit of risk. Purmo Group Oyj is currently generating about 0.04 per unit of volatility. If you would invest 841.00 in Purmo Group Oyj on September 3, 2024 and sell it today you would earn a total of 284.00 from holding Purmo Group Oyj or generate 33.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. Purmo Group Oyj
Performance |
| Timeline |
| SSH Communications |
| Purmo Group Oyj |
SSH Communications and Purmo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and Purmo Group
The main advantage of trading using opposite SSH Communications and Purmo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications position performs unexpectedly, Purmo Group 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 Purmo Group will offset losses from the drop in Purmo Group's long position.| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia Oyj |
| Purmo Group vs. Sanoma Oyj | Purmo Group vs. CapMan Oyj B | Purmo Group vs. HKFoods Oyj A | Purmo Group vs. Spinnova Oy |
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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