Correlation Between Stora Enso and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Stora Enso 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 Stora Enso and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Stora Enso Oyj, you can compare the effects of market volatilities on Stora Enso and Stora Enso 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 Stora Enso with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Stora Enso.
Diversification Opportunities for Stora Enso and Stora Enso
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Stora and Stora is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Stora Enso 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 Stora Enso Oyj are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Stora Enso i.e., Stora Enso and Stora Enso go up and down completely randomly.
Pair Corralation between Stora Enso and Stora Enso
Assuming the 90 days trading horizon Stora Enso Oyj is expected to under-perform the Stora Enso. In addition to that, Stora Enso is 1.33 times more volatile than Stora Enso Oyj. It trades about -0.4 of its total potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.44 per unit of volatility. If you would invest 12,060 in Stora Enso Oyj on September 3, 2024 and sell it today you would lose (1,470) from holding Stora Enso Oyj or give up 12.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. Stora Enso Oyj
Performance |
| Timeline |
| Stora Enso Oyj |
| Stora Enso Oyj |
Stora Enso and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Stora Enso
The main advantage of trading using opposite Stora Enso and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Stora Enso vs. Stora Enso Oyj | Stora Enso vs. Svenska Cellulosa Aktiebolaget | Stora Enso vs. Holmen AB | Stora Enso vs. Trelleborg AB |
| Stora Enso vs. Svenska Cellulosa Aktiebolaget | Stora Enso vs. Holmen AB | Stora Enso vs. AB SKF | Stora Enso vs. Trelleborg AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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