Correlation Between Citycon Oyj and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Citycon Oyj and WT OFFSHORE 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 WT OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citycon Oyj and WT OFFSHORE, you can compare the effects of market volatilities on Citycon Oyj and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citycon Oyj and WT OFFSHORE.
Diversification Opportunities for Citycon Oyj and WT OFFSHORE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citycon and UWV is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Citycon Oyj and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Citycon Oyj i.e., Citycon Oyj and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Citycon Oyj and WT OFFSHORE
Assuming the 90 days trading horizon Citycon Oyj is expected to generate 0.58 times more return on investment than WT OFFSHORE. However, Citycon Oyj is 1.71 times less risky than WT OFFSHORE. It trades about -0.01 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.03 per unit of risk. If you would invest 337.00 in Citycon Oyj on December 2, 2024 and sell it today you would lose (31.00) from holding Citycon Oyj or give up 9.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citycon Oyj vs. WT OFFSHORE
Performance |
| Timeline |
| Citycon Oyj |
| WT OFFSHORE |
Citycon Oyj and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citycon Oyj and WT OFFSHORE
The main advantage of trading using opposite Citycon Oyj and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citycon Oyj position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Citycon Oyj vs. Penta Ocean Construction Co | Citycon Oyj vs. Southwest Airlines Co | Citycon Oyj vs. OFFICE DEPOT | Citycon Oyj vs. Federal Agricultural Mortgage |
| WT OFFSHORE vs. SCANSOURCE | WT OFFSHORE vs. Fast Retailing Co | WT OFFSHORE vs. Linedata Services SA | WT OFFSHORE vs. TRADELINK ELECTRON |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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