Correlation Between Apetit Oyj and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Apetit Oyj and Stora Enso 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 Apetit Oyj and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apetit Oyj and Stora Enso Oyj, you can compare the effects of market volatilities on Apetit Oyj and Stora Enso 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 Apetit Oyj with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apetit Oyj and Stora Enso.
Diversification Opportunities for Apetit Oyj and Stora Enso
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apetit and Stora is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apetit Oyj and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and Apetit 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 Apetit Oyj are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Apetit Oyj i.e., Apetit Oyj and Stora Enso go up and down completely randomly.
Pair Corralation between Apetit Oyj and Stora Enso
Assuming the 90 days trading horizon Apetit Oyj is expected to generate 2.94 times less return on investment than Stora Enso. But when comparing it to its historical volatility, Apetit Oyj is 1.73 times less risky than Stora Enso. It trades about 0.19 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,148 in Stora Enso Oyj on December 29, 2023 and sell it today you would earn a total of 140.00 from holding Stora Enso Oyj or generate 12.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Apetit Oyj vs. Stora Enso Oyj
Performance |
Timeline |
Apetit Oyj |
Stora Enso Oyj |
Apetit Oyj and Stora Enso Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apetit Oyj and Stora Enso
The main advantage of trading using opposite Apetit Oyj and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apetit Oyj position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.Apetit Oyj vs. Nokia Oyj | Apetit Oyj vs. Sampo Oyj A | Apetit Oyj vs. Telefonaktiebolaget LM Ericsson | Apetit Oyj vs. Telia Company AB |
Stora Enso vs. Remedy Entertainment Oyj | Stora Enso vs. QPR Software Oyj | Stora Enso vs. Sotkamo Silver AB | Stora Enso vs. Detection Technology OY |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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