Correlation Between Trelleborg and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Trelleborg and Stora Enso 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 Trelleborg and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trelleborg AB and Stora Enso Oyj, you can compare the effects of market volatilities on Trelleborg and Stora Enso 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 Trelleborg with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trelleborg and Stora Enso.
Diversification Opportunities for Trelleborg and Stora Enso
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trelleborg and Stora is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Trelleborg AB and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Trelleborg 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 Trelleborg AB are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Trelleborg i.e., Trelleborg and Stora Enso go up and down completely randomly.
Pair Corralation between Trelleborg and Stora Enso
Assuming the 90 days trading horizon Trelleborg AB is expected to generate 1.15 times more return on investment than Stora Enso. However, Trelleborg is 1.15 times more volatile than Stora Enso Oyj. It trades about 0.06 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.35 per unit of risk. If you would invest 35,360 in Trelleborg AB on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Trelleborg AB or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trelleborg AB vs. Stora Enso Oyj
Performance |
| Timeline |
| Trelleborg AB |
| Stora Enso Oyj |
Trelleborg and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trelleborg and Stora Enso
The main advantage of trading using opposite Trelleborg and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trelleborg position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.| Trelleborg vs. AB SKF | Trelleborg vs. Sandvik AB | Trelleborg vs. Alfa Laval AB | Trelleborg vs. Husqvarna AB |
| Stora Enso vs. Svenska Cellulosa Aktiebolaget | Stora Enso vs. Holmen AB | Stora Enso vs. AB SKF | Stora Enso vs. Trelleborg AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |