Correlation Between United Bankers and Vaisala Oyj
Can any of the company-specific risk be diversified away by investing in both United Bankers and Vaisala Oyj 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 Vaisala Oyj 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 Vaisala Oyj A, you can compare the effects of market volatilities on United Bankers and Vaisala Oyj 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 Vaisala Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankers and Vaisala Oyj.
Diversification Opportunities for United Bankers and Vaisala Oyj
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Vaisala is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding United Bankers Oyj and Vaisala Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaisala Oyj A 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 Vaisala Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaisala Oyj A has no effect on the direction of United Bankers i.e., United Bankers and Vaisala Oyj go up and down completely randomly.
Pair Corralation between United Bankers and Vaisala Oyj
Assuming the 90 days trading horizon United Bankers is expected to generate 6.36 times less return on investment than Vaisala Oyj. But when comparing it to its historical volatility, United Bankers Oyj is 1.1 times less risky than Vaisala Oyj. It trades about 0.04 of its potential returns per unit of risk. Vaisala Oyj A is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,470 in Vaisala Oyj A on August 30, 2024 and sell it today you would earn a total of 375.00 from holding Vaisala Oyj A or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Bankers Oyj vs. Vaisala Oyj A
Performance |
| Timeline |
| United Bankers Oyj |
| Vaisala Oyj A |
United Bankers and Vaisala Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankers and Vaisala Oyj
The main advantage of trading using opposite United Bankers and Vaisala Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankers position performs unexpectedly, Vaisala Oyj 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 Vaisala Oyj will offset losses from the drop in Vaisala Oyj's long position.| United Bankers vs. Alandsbanken Abp A | United Bankers vs. Nordea Bank Abp | United Bankers vs. SSH Communications Security | United Bankers vs. Tamtron Group Oyj |
| Vaisala Oyj vs. Revenio Group | Vaisala Oyj vs. Ponsse Oyj 1 | Vaisala Oyj vs. Wartsila Oyj Abp | Vaisala Oyj vs. Cargotec 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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