Correlation Between Stora Enso and Metsa Board
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Metsa Board 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 Metsa Board 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 Metsa Board Oyj, you can compare the effects of market volatilities on Stora Enso and Metsa Board 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 Metsa Board. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Metsa Board.
Diversification Opportunities for Stora Enso and Metsa Board
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stora and Metsa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Metsa Board Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metsa Board 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 Metsa Board. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metsa Board Oyj has no effect on the direction of Stora Enso i.e., Stora Enso and Metsa Board go up and down completely randomly.
Pair Corralation between Stora Enso and Metsa Board
If you would invest (100.00) in Metsa Board Oyj on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Metsa Board Oyj or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. Metsa Board Oyj
Performance |
| Timeline |
| Stora Enso Oyj |
| Metsa Board Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stora Enso and Metsa Board Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Metsa Board
The main advantage of trading using opposite Stora Enso and Metsa Board positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Metsa Board 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 Metsa Board will offset losses from the drop in Metsa Board's long position.| Stora Enso vs. Stora Enso Oyj | Stora Enso vs. UPM Kymmene Oyj | Stora Enso vs. Huhtamaki Oyj | Stora Enso vs. Orion Oyj A |
| Metsa Board vs. UPM Kymmene Oyj | Metsa Board vs. Stora Enso Oyj | Metsa Board vs. Metsa Board Oyj | Metsa Board vs. Valmet 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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