Correlation Between Stora Enso and Revenio
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Revenio 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 Revenio 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 Revenio Group, you can compare the effects of market volatilities on Stora Enso and Revenio 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 Revenio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Revenio.
Diversification Opportunities for Stora Enso and Revenio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stora and Revenio is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group 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 Revenio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revenio Group has no effect on the direction of Stora Enso i.e., Stora Enso and Revenio go up and down completely randomly.
Pair Corralation between Stora Enso and Revenio
Assuming the 90 days trading horizon Stora Enso is expected to generate 1.64 times less return on investment than Revenio. But when comparing it to its historical volatility, Stora Enso Oyj is 1.43 times less risky than Revenio. It trades about 0.31 of its potential returns per unit of risk. Revenio Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,664 in Revenio Group on October 23, 2024 and sell it today you would earn a total of 332.00 from holding Revenio Group or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. Revenio Group
Performance |
| Timeline |
| Stora Enso Oyj |
| Revenio Group |
Stora Enso and Revenio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Revenio
The main advantage of trading using opposite Stora Enso and Revenio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Revenio 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 Revenio will offset losses from the drop in Revenio's long position.| Stora Enso vs. UPM Kymmene Oyj | Stora Enso vs. Wartsila Oyj Abp | Stora Enso vs. Fortum Oyj | Stora Enso vs. Sampo Oyj A |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |