Correlation Between TietoEVRY Corp and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both TietoEVRY Corp and Kesko Oyj 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 TietoEVRY Corp and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TietoEVRY Corp and Kesko Oyj, you can compare the effects of market volatilities on TietoEVRY Corp and Kesko Oyj 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 TietoEVRY Corp with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of TietoEVRY Corp and Kesko Oyj.
Diversification Opportunities for TietoEVRY Corp and Kesko Oyj
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TietoEVRY and Kesko is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding TietoEVRY Corp and Kesko Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj and TietoEVRY Corp 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 TietoEVRY Corp are associated (or correlated) with Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj has no effect on the direction of TietoEVRY Corp i.e., TietoEVRY Corp and Kesko Oyj go up and down completely randomly.
Pair Corralation between TietoEVRY Corp and Kesko Oyj
Assuming the 90 days trading horizon TietoEVRY Corp is expected to generate 1.28 times more return on investment than Kesko Oyj. However, TietoEVRY Corp is 1.28 times more volatile than Kesko Oyj. It trades about -0.14 of its potential returns per unit of risk. Kesko Oyj is currently generating about -0.18 per unit of risk. If you would invest 1,754 in TietoEVRY Corp on August 31, 2024 and sell it today you would lose (59.00) from holding TietoEVRY Corp or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TietoEVRY Corp vs. Kesko Oyj
Performance |
| Timeline |
| TietoEVRY Corp |
| Kesko Oyj |
TietoEVRY Corp and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TietoEVRY Corp and Kesko Oyj
The main advantage of trading using opposite TietoEVRY Corp and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TietoEVRY Corp position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| TietoEVRY Corp vs. Sampo Oyj A | TietoEVRY Corp vs. Valmet Oyj | TietoEVRY Corp vs. Nordea Bank Abp | TietoEVRY Corp vs. Fortum Oyj |
| Kesko Oyj vs. Kesko Oyj | Kesko Oyj vs. Sampo Oyj A | Kesko Oyj vs. Tokmanni Group Oyj | Kesko Oyj vs. UPM Kymmene 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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