Correlation Between Wartsila Oyj and Terveystalo
Can any of the company-specific risk be diversified away by investing in both Wartsila Oyj and Terveystalo 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 Terveystalo 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 Terveystalo Oy, you can compare the effects of market volatilities on Wartsila Oyj and Terveystalo 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 Terveystalo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wartsila Oyj and Terveystalo.
Diversification Opportunities for Wartsila Oyj and Terveystalo
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wartsila and Terveystalo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wartsila Oyj Abp and Terveystalo Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terveystalo Oy 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 Terveystalo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terveystalo Oy has no effect on the direction of Wartsila Oyj i.e., Wartsila Oyj and Terveystalo go up and down completely randomly.
Pair Corralation between Wartsila Oyj and Terveystalo
Assuming the 90 days trading horizon Wartsila Oyj is expected to generate 1.16 times less return on investment than Terveystalo. In addition to that, Wartsila Oyj is 1.15 times more volatile than Terveystalo Oy. It trades about 0.08 of its total potential returns per unit of risk. Terveystalo Oy is currently generating about 0.1 per unit of volatility. If you would invest 732.00 in Terveystalo Oy on September 14, 2024 and sell it today you would earn a total of 336.00 from holding Terveystalo Oy or generate 45.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Wartsila Oyj Abp vs. Terveystalo Oy
Performance |
| Timeline |
| Wartsila Oyj Abp |
| Terveystalo Oy |
Wartsila Oyj and Terveystalo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wartsila Oyj and Terveystalo
The main advantage of trading using opposite Wartsila Oyj and Terveystalo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wartsila Oyj position performs unexpectedly, Terveystalo 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 Terveystalo will offset losses from the drop in Terveystalo's long position.| Wartsila Oyj vs. Telefonaktiebolaget LM Ericsson | Wartsila Oyj vs. KONE Oyj | Wartsila Oyj vs. Nordea Bank Abp | Wartsila Oyj vs. TietoEVRY Corp |
| Terveystalo vs. Sampo Oyj A | Terveystalo vs. UPM Kymmene Oyj | Terveystalo vs. Wartsila Oyj Abp | Terveystalo vs. Elisa 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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