Correlation Between Wartsila Oyj and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Wartsila Oyj and Fortum 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 Wartsila Oyj and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wartsila Oyj Abp and Fortum Oyj, you can compare the effects of market volatilities on Wartsila Oyj and Fortum 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 Wartsila Oyj with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wartsila Oyj and Fortum Oyj.
Diversification Opportunities for Wartsila Oyj and Fortum Oyj
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wartsila and Fortum is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wartsila Oyj Abp and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Wartsila 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 Wartsila Oyj Abp are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of Wartsila Oyj i.e., Wartsila Oyj and Fortum Oyj go up and down completely randomly.
Pair Corralation between Wartsila Oyj and Fortum Oyj
Assuming the 90 days trading horizon Wartsila Oyj Abp is expected to generate 0.76 times more return on investment than Fortum Oyj. However, Wartsila Oyj Abp is 1.32 times less risky than Fortum Oyj. It trades about 0.17 of its potential returns per unit of risk. Fortum Oyj is currently generating about 0.0 per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wartsila Oyj Abp vs. Fortum Oyj
Performance |
| Timeline |
| Wartsila Oyj Abp |
| Fortum Oyj |
Wartsila Oyj and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wartsila Oyj and Fortum Oyj
The main advantage of trading using opposite Wartsila Oyj and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wartsila Oyj position performs unexpectedly, Fortum 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| Wartsila Oyj vs. Sampo Oyj A | Wartsila Oyj vs. Fortum Oyj | Wartsila Oyj vs. UPM Kymmene Oyj | Wartsila Oyj vs. Nordea Bank Abp |
| Fortum Oyj vs. HKFoods Oyj A | Fortum Oyj vs. Nightingale Health Oyj | Fortum Oyj vs. Alandsbanken Abp B | Fortum Oyj vs. Finnair 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |