Correlation Between Viafin Service and Cargotec Oyj
Can any of the company-specific risk be diversified away by investing in both Viafin Service and Cargotec 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 Viafin Service and Cargotec Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viafin Service Oyj and Cargotec Oyj, you can compare the effects of market volatilities on Viafin Service and Cargotec 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 Viafin Service with a short position of Cargotec Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viafin Service and Cargotec Oyj.
Diversification Opportunities for Viafin Service and Cargotec Oyj
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viafin and Cargotec is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj and Cargotec Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargotec Oyj and Viafin Service 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 Viafin Service Oyj are associated (or correlated) with Cargotec Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargotec Oyj has no effect on the direction of Viafin Service i.e., Viafin Service and Cargotec Oyj go up and down completely randomly.
Pair Corralation between Viafin Service and Cargotec Oyj
Assuming the 90 days trading horizon Viafin Service Oyj is expected to generate 0.58 times more return on investment than Cargotec Oyj. However, Viafin Service Oyj is 1.72 times less risky than Cargotec Oyj. It trades about 0.07 of its potential returns per unit of risk. Cargotec Oyj is currently generating about 0.01 per unit of risk. If you would invest 1,277 in Viafin Service Oyj on August 29, 2024 and sell it today you would earn a total of 653.00 from holding Viafin Service Oyj or generate 51.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viafin Service Oyj vs. Cargotec Oyj
Performance |
| Timeline |
| Viafin Service Oyj |
| Cargotec Oyj |
Viafin Service and Cargotec Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viafin Service and Cargotec Oyj
The main advantage of trading using opposite Viafin Service and Cargotec Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viafin Service position performs unexpectedly, Cargotec 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 Cargotec Oyj will offset losses from the drop in Cargotec Oyj's long position.| Viafin Service vs. Elecster Oyj A | Viafin Service vs. Vaisala Oyj A | Viafin Service vs. Nokian Renkaat Oyj | Viafin Service vs. CapMan Oyj B |
| Cargotec Oyj vs. Aktia Bank Abp | Cargotec Oyj vs. Alandsbanken Abp B | Cargotec Oyj vs. Alandsbanken Abp A | Cargotec Oyj vs. Sampo Oyj A |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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