Correlation Between Citycon Oyj and NEW WORLD
Can any of the company-specific risk be diversified away by investing in both Citycon Oyj and NEW WORLD 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 Citycon Oyj and NEW WORLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citycon Oyj and NEW WORLD DEVCO, you can compare the effects of market volatilities on Citycon Oyj and NEW WORLD 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 Citycon Oyj with a short position of NEW WORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citycon Oyj and NEW WORLD.
Diversification Opportunities for Citycon Oyj and NEW WORLD
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citycon and NEW is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Citycon Oyj and NEW WORLD DEVCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW WORLD DEVCO and Citycon Oyj 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 Citycon Oyj are associated (or correlated) with NEW WORLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW WORLD DEVCO has no effect on the direction of Citycon Oyj i.e., Citycon Oyj and NEW WORLD go up and down completely randomly.
Pair Corralation between Citycon Oyj and NEW WORLD
Assuming the 90 days trading horizon Citycon Oyj is expected to generate 0.52 times more return on investment than NEW WORLD. However, Citycon Oyj is 1.93 times less risky than NEW WORLD. It trades about -0.03 of its potential returns per unit of risk. NEW WORLD DEVCO is currently generating about -0.07 per unit of risk. If you would invest 361.00 in Citycon Oyj on October 13, 2024 and sell it today you would lose (33.00) from holding Citycon Oyj or give up 9.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citycon Oyj vs. NEW WORLD DEVCO
Performance |
| Timeline |
| Citycon Oyj |
| NEW WORLD DEVCO |
Citycon Oyj and NEW WORLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citycon Oyj and NEW WORLD
The main advantage of trading using opposite Citycon Oyj and NEW WORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citycon Oyj position performs unexpectedly, NEW WORLD 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 NEW WORLD will offset losses from the drop in NEW WORLD's long position.| Citycon Oyj vs. PDS Biotechnology Corp | Citycon Oyj vs. ORMAT TECHNOLOGIES | Citycon Oyj vs. THORNEY TECHS LTD | Citycon Oyj vs. VELA TECHNOLPLC LS 0001 |
| NEW WORLD vs. AAC TECHNOLOGHLDGADR | NEW WORLD vs. Minerals Technologies | NEW WORLD vs. Digilife Technologies Limited | NEW WORLD vs. The Japan Steel |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |