Correlation Between Valmet Oyj and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Valmet Oyj and Kesko 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 Valmet Oyj and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valmet Oyj and Kesko Oyj, you can compare the effects of market volatilities on Valmet Oyj and Kesko 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 Valmet Oyj with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valmet Oyj and Kesko Oyj.
Diversification Opportunities for Valmet Oyj and Kesko Oyj
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Valmet and Kesko is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Valmet Oyj and Kesko Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj and Valmet 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 Valmet Oyj are associated (or correlated) with Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj has no effect on the direction of Valmet Oyj i.e., Valmet Oyj and Kesko Oyj go up and down completely randomly.
Pair Corralation between Valmet Oyj and Kesko Oyj
Assuming the 90 days trading horizon Valmet Oyj is expected to under-perform the Kesko Oyj. In addition to that, Valmet Oyj is 1.44 times more volatile than Kesko Oyj. It trades about -0.02 of its total potential returns per unit of risk. Kesko Oyj is currently generating about 0.02 per unit of volatility. If you would invest 1,712 in Kesko Oyj on September 2, 2024 and sell it today you would earn a total of 158.00 from holding Kesko Oyj or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valmet Oyj vs. Kesko Oyj
Performance |
| Timeline |
| Valmet Oyj |
| Kesko Oyj |
Valmet Oyj and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valmet Oyj and Kesko Oyj
The main advantage of trading using opposite Valmet Oyj and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valmet Oyj position performs unexpectedly, Kesko 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Valmet Oyj vs. Admicom Oyj | Valmet Oyj vs. Vincit Group Oyj | Valmet Oyj vs. Harvia Oyj | Valmet Oyj vs. Remedy Entertainment Oyj |
| Kesko Oyj vs. Kesko Oyj | Kesko Oyj vs. Sampo Oyj A | Kesko Oyj vs. Tokmanni Group Oyj | Kesko Oyj vs. UPM Kymmene 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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