Correlation Between TietoEVRY Corp and Oma Saastopankki
Can any of the company-specific risk be diversified away by investing in both TietoEVRY Corp and Oma Saastopankki 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 Oma Saastopankki into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TietoEVRY Corp and Oma Saastopankki Oyj, you can compare the effects of market volatilities on TietoEVRY Corp and Oma Saastopankki 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 Oma Saastopankki. Check out your portfolio center. Please also check ongoing floating volatility patterns of TietoEVRY Corp and Oma Saastopankki.
Diversification Opportunities for TietoEVRY Corp and Oma Saastopankki
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TietoEVRY and Oma is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TietoEVRY Corp and Oma Saastopankki Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oma Saastopankki 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 Oma Saastopankki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oma Saastopankki Oyj has no effect on the direction of TietoEVRY Corp i.e., TietoEVRY Corp and Oma Saastopankki go up and down completely randomly.
Pair Corralation between TietoEVRY Corp and Oma Saastopankki
Assuming the 90 days trading horizon TietoEVRY Corp is expected to under-perform the Oma Saastopankki. But the stock apears to be less risky and, when comparing its historical volatility, TietoEVRY Corp is 2.36 times less risky than Oma Saastopankki. The stock trades about -0.21 of its potential returns per unit of risk. The Oma Saastopankki Oyj is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,164 in Oma Saastopankki Oyj on August 30, 2024 and sell it today you would lose (72.00) from holding Oma Saastopankki Oyj or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TietoEVRY Corp vs. Oma Saastopankki Oyj
Performance |
| Timeline |
| TietoEVRY Corp |
| Oma Saastopankki Oyj |
TietoEVRY Corp and Oma Saastopankki Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TietoEVRY Corp and Oma Saastopankki
The main advantage of trading using opposite TietoEVRY Corp and Oma Saastopankki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TietoEVRY Corp position performs unexpectedly, Oma Saastopankki 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 Oma Saastopankki will offset losses from the drop in Oma Saastopankki'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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