Correlation Between United Bankers and Sotkamo Silver
Can any of the company-specific risk be diversified away by investing in both United Bankers and Sotkamo Silver 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 United Bankers and Sotkamo Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankers Oyj and Sotkamo Silver AB, you can compare the effects of market volatilities on United Bankers and Sotkamo Silver 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 United Bankers with a short position of Sotkamo Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankers and Sotkamo Silver.
Diversification Opportunities for United Bankers and Sotkamo Silver
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Sotkamo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Bankers Oyj and Sotkamo Silver AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotkamo Silver AB and United Bankers 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 United Bankers Oyj are associated (or correlated) with Sotkamo Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotkamo Silver AB has no effect on the direction of United Bankers i.e., United Bankers and Sotkamo Silver go up and down completely randomly.
Pair Corralation between United Bankers and Sotkamo Silver
Assuming the 90 days trading horizon United Bankers is expected to generate 3.16 times less return on investment than Sotkamo Silver. But when comparing it to its historical volatility, United Bankers Oyj is 2.73 times less risky than Sotkamo Silver. It trades about 0.05 of its potential returns per unit of risk. Sotkamo Silver AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Sotkamo Silver AB on September 12, 2024 and sell it today you would earn a total of 5.26 from holding Sotkamo Silver AB or generate 131.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bankers Oyj vs. Sotkamo Silver AB
Performance |
| Timeline |
| United Bankers Oyj |
| Sotkamo Silver AB |
United Bankers and Sotkamo Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankers and Sotkamo Silver
The main advantage of trading using opposite United Bankers and Sotkamo Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankers position performs unexpectedly, Sotkamo Silver 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 Sotkamo Silver will offset losses from the drop in Sotkamo Silver's long position.| United Bankers vs. CapMan Oyj B | United Bankers vs. HKFoods Oyj A | United Bankers vs. KONE Oyj | United Bankers vs. Solteq PLC |
| Sotkamo Silver vs. Outokumpu Oyj | Sotkamo Silver vs. SSAB AB ser | Sotkamo Silver vs. Telia Company AB | Sotkamo Silver vs. Wartsila Oyj Abp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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