Correlation Between Vincit Group and Exel Composites
Can any of the company-specific risk be diversified away by investing in both Vincit Group and Exel Composites 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 Vincit Group and Exel Composites into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vincit Group Oyj and Exel Composites Oyj, you can compare the effects of market volatilities on Vincit Group and Exel Composites 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 Vincit Group with a short position of Exel Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincit Group and Exel Composites.
Diversification Opportunities for Vincit Group and Exel Composites
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vincit and Exel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vincit Group Oyj and Exel Composites Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Composites Oyj and Vincit Group 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 Vincit Group Oyj are associated (or correlated) with Exel Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Composites Oyj has no effect on the direction of Vincit Group i.e., Vincit Group and Exel Composites go up and down completely randomly.
Pair Corralation between Vincit Group and Exel Composites
Assuming the 90 days trading horizon Vincit Group Oyj is expected to generate 0.59 times more return on investment than Exel Composites. However, Vincit Group Oyj is 1.69 times less risky than Exel Composites. It trades about -0.12 of its potential returns per unit of risk. Exel Composites Oyj is currently generating about -0.35 per unit of risk. If you would invest 196.00 in Vincit Group Oyj on September 2, 2024 and sell it today you would lose (8.00) from holding Vincit Group Oyj or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vincit Group Oyj vs. Exel Composites Oyj
Performance |
| Timeline |
| Vincit Group Oyj |
| Exel Composites Oyj |
Vincit Group and Exel Composites Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vincit Group and Exel Composites
The main advantage of trading using opposite Vincit Group and Exel Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincit Group position performs unexpectedly, Exel Composites 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 Exel Composites will offset losses from the drop in Exel Composites' long position.| Vincit Group vs. Tecnotree Oyj | Vincit Group vs. Qt Group Oyj | Vincit Group vs. Bittium Oyj | Vincit Group vs. Harvia Oyj |
| Exel Composites vs. Admicom Oyj | Exel Composites vs. Vincit Group Oyj | Exel Composites vs. Harvia Oyj | Exel Composites vs. Remedy Entertainment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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