Correlation Between Viafin Service and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Viafin Service and Wartsila 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 Wartsila 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 Wartsila Oyj Abp, you can compare the effects of market volatilities on Viafin Service and Wartsila 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 Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viafin Service and Wartsila Oyj.
Diversification Opportunities for Viafin Service and Wartsila Oyj
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viafin and Wartsila is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp 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 Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Viafin Service i.e., Viafin Service and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Viafin Service and Wartsila Oyj
Assuming the 90 days trading horizon Viafin Service is expected to generate 1.85 times less return on investment than Wartsila Oyj. But when comparing it to its historical volatility, Viafin Service Oyj is 1.85 times less risky than Wartsila Oyj. It trades about 0.17 of its potential returns per unit of risk. Wartsila Oyj Abp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,741 in Wartsila Oyj Abp on November 3, 2024 and sell it today you would earn a total of 85.00 from holding Wartsila Oyj Abp or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viafin Service Oyj vs. Wartsila Oyj Abp
Performance |
| Timeline |
| Viafin Service Oyj |
| Wartsila Oyj Abp |
Viafin Service and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viafin Service and Wartsila Oyj
The main advantage of trading using opposite Viafin Service and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viafin Service position performs unexpectedly, Wartsila 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 Wartsila Oyj will offset losses from the drop in Wartsila Oyj's long position.| Viafin Service vs. SSH Communications Security | Viafin Service vs. Tamtron Group Oyj | Viafin Service vs. Metsa Board Oyj | Viafin Service vs. Qt Group Oyj |
| Wartsila Oyj vs. Sampo Oyj A | Wartsila Oyj vs. Fortum Oyj | Wartsila Oyj vs. UPM Kymmene Oyj | Wartsila Oyj vs. Nordea Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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