Correlation Between SSH Communications and United Bankers
Can any of the company-specific risk be diversified away by investing in both SSH Communications and United Bankers 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 United Bankers 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 United Bankers Oyj, you can compare the effects of market volatilities on SSH Communications and United Bankers 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 United Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and United Bankers.
Diversification Opportunities for SSH Communications and United Bankers
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSH and United is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and United Bankers Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankers 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 United Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankers Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and United Bankers go up and down completely randomly.
Pair Corralation between SSH Communications and United Bankers
Assuming the 90 days trading horizon SSH Communications Security is expected to under-perform the United Bankers. In addition to that, SSH Communications is 2.42 times more volatile than United Bankers Oyj. It trades about -0.14 of its total potential returns per unit of risk. United Bankers Oyj is currently generating about 0.04 per unit of volatility. If you would invest 1,780 in United Bankers Oyj on August 30, 2024 and sell it today you would earn a total of 20.00 from holding United Bankers Oyj or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. United Bankers Oyj
Performance |
| Timeline |
| SSH Communications |
| United Bankers Oyj |
SSH Communications and United Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and United Bankers
The main advantage of trading using opposite SSH Communications and United Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications position performs unexpectedly, United Bankers 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 United Bankers will offset losses from the drop in United Bankers' long position.| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Harvia Oyj | SSH Communications vs. Kamux Suomi Oy |
| United Bankers vs. Alandsbanken Abp A | United Bankers vs. Nordea Bank Abp | United Bankers vs. SSH Communications Security | United Bankers vs. Tamtron Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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