Correlation Between Tecnotree Oyj and UPM Kymmene
Can any of the company-specific risk be diversified away by investing in both Tecnotree Oyj and UPM Kymmene 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 Tecnotree Oyj and UPM Kymmene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tecnotree Oyj and UPM Kymmene Oyj, you can compare the effects of market volatilities on Tecnotree Oyj and UPM Kymmene 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 Tecnotree Oyj with a short position of UPM Kymmene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecnotree Oyj and UPM Kymmene.
Diversification Opportunities for Tecnotree Oyj and UPM Kymmene
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tecnotree and UPM is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tecnotree Oyj and UPM Kymmene Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPM Kymmene Oyj and Tecnotree Oyj 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 Tecnotree Oyj are associated (or correlated) with UPM Kymmene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPM Kymmene Oyj has no effect on the direction of Tecnotree Oyj i.e., Tecnotree Oyj and UPM Kymmene go up and down completely randomly.
Pair Corralation between Tecnotree Oyj and UPM Kymmene
Assuming the 90 days trading horizon Tecnotree Oyj is expected to under-perform the UPM Kymmene. In addition to that, Tecnotree Oyj is 2.18 times more volatile than UPM Kymmene Oyj. It trades about -0.04 of its total potential returns per unit of risk. UPM Kymmene Oyj is currently generating about 0.0 per unit of volatility. If you would invest 3,108 in UPM Kymmene Oyj on November 19, 2024 and sell it today you would lose (162.00) from holding UPM Kymmene Oyj or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tecnotree Oyj vs. UPM Kymmene Oyj
Performance |
| Timeline |
| Tecnotree Oyj |
| UPM Kymmene Oyj |
Tecnotree Oyj and UPM Kymmene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tecnotree Oyj and UPM Kymmene
The main advantage of trading using opposite Tecnotree Oyj and UPM Kymmene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecnotree Oyj position performs unexpectedly, UPM Kymmene 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 UPM Kymmene will offset losses from the drop in UPM Kymmene's long position.| Tecnotree Oyj vs. Harvia Oyj | Tecnotree Oyj vs. Qt Group Oyj | Tecnotree Oyj vs. Kamux Suomi Oy | Tecnotree Oyj vs. Tokmanni Group Oyj |
| UPM Kymmene vs. Sampo Oyj A | UPM Kymmene vs. Fortum Oyj | UPM Kymmene vs. Nordea Bank Abp | UPM Kymmene vs. Stora Enso 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |