Correlation Between Toivo Group and UPM Kymmene
Can any of the company-specific risk be diversified away by investing in both Toivo Group 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 Toivo Group and UPM Kymmene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toivo Group Oyj and UPM Kymmene Oyj, you can compare the effects of market volatilities on Toivo Group 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 Toivo Group with a short position of UPM Kymmene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toivo Group and UPM Kymmene.
Diversification Opportunities for Toivo Group and UPM Kymmene
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Toivo and UPM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Toivo Group 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 Toivo Group 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 Toivo Group 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 Toivo Group i.e., Toivo Group and UPM Kymmene go up and down completely randomly.
Pair Corralation between Toivo Group and UPM Kymmene
Assuming the 90 days trading horizon Toivo Group Oyj is expected to under-perform the UPM Kymmene. In addition to that, Toivo Group is 2.17 times more volatile than UPM Kymmene Oyj. It trades about -0.11 of its total potential returns per unit of risk. UPM Kymmene Oyj is currently generating about 0.22 per unit of volatility. If you would invest 2,572 in UPM Kymmene Oyj on October 23, 2024 and sell it today you would earn a total of 124.00 from holding UPM Kymmene Oyj or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Toivo Group Oyj vs. UPM Kymmene Oyj
Performance |
| Timeline |
| Toivo Group Oyj |
| UPM Kymmene Oyj |
Toivo Group and UPM Kymmene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toivo Group and UPM Kymmene
The main advantage of trading using opposite Toivo Group and UPM Kymmene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toivo Group 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.| Toivo Group vs. Nightingale Health Oyj | Toivo Group vs. Sotkamo Silver AB | Toivo Group vs. SSH Communications Security | Toivo Group vs. Aktia Bank Abp |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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