Correlation Between TietoEVRY Corp and YIT Oyj
Can any of the company-specific risk be diversified away by investing in both TietoEVRY Corp and YIT 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 YIT 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 YIT Oyj, you can compare the effects of market volatilities on TietoEVRY Corp and YIT 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 YIT Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of TietoEVRY Corp and YIT Oyj.
Diversification Opportunities for TietoEVRY Corp and YIT Oyj
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between TietoEVRY and YIT is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding TietoEVRY Corp and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT 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 YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of TietoEVRY Corp i.e., TietoEVRY Corp and YIT Oyj go up and down completely randomly.
Pair Corralation between TietoEVRY Corp and YIT Oyj
Assuming the 90 days trading horizon TietoEVRY Corp is expected to under-perform the YIT Oyj. But the stock apears to be less risky and, when comparing its historical volatility, TietoEVRY Corp is 1.69 times less risky than YIT Oyj. The stock trades about -0.03 of its potential returns per unit of risk. The YIT Oyj is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 158.00 in YIT Oyj on October 22, 2024 and sell it today you would earn a total of 81.00 from holding YIT Oyj or generate 51.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TietoEVRY Corp vs. YIT Oyj
Performance |
| Timeline |
| TietoEVRY Corp |
| YIT Oyj |
TietoEVRY Corp and YIT Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TietoEVRY Corp and YIT Oyj
The main advantage of trading using opposite TietoEVRY Corp and YIT Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TietoEVRY Corp position performs unexpectedly, YIT 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 YIT Oyj will offset losses from the drop in YIT 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 |
| YIT Oyj vs. Outokumpu Oyj | YIT Oyj vs. Wartsila Oyj Abp | YIT Oyj vs. Telia Company AB | YIT Oyj vs. Konecranes Plc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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