Correlation Between Stora Enso and Rottneros
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Rottneros 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 Rottneros 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 Rottneros AB, you can compare the effects of market volatilities on Stora Enso and Rottneros 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 Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Rottneros.
Diversification Opportunities for Stora Enso and Rottneros
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stora and Rottneros is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB 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 Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Stora Enso i.e., Stora Enso and Rottneros go up and down completely randomly.
Pair Corralation between Stora Enso and Rottneros
Assuming the 90 days trading horizon Stora Enso Oyj is expected to generate 0.71 times more return on investment than Rottneros. However, Stora Enso Oyj is 1.41 times less risky than Rottneros. It trades about 0.12 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.06 per unit of risk. If you would invest 10,500 in Stora Enso Oyj on November 20, 2025 and sell it today you would earn a total of 1,560 from holding Stora Enso Oyj or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Stora Enso Oyj vs. Rottneros AB
Performance |
| Timeline |
| Stora Enso Oyj |
| Rottneros AB |
Stora Enso and Rottneros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Rottneros
The main advantage of trading using opposite Stora Enso and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' long position.| Stora Enso vs. SSAB AB | Stora Enso vs. Svenska Cellulosa Aktiebolaget | Stora Enso vs. BillerudKorsnas AB | Stora Enso vs. HEXPOL AB |
| Rottneros vs. Lucara Diamond Corp | Rottneros vs. Botnia Gold AB | Rottneros vs. BE Group AB | Rottneros vs. Arctic Paper SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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