Correlation Between Neste Oyj and Saras SpA
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and Saras SpA 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 Neste Oyj and Saras SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and Saras SpA ADR, you can compare the effects of market volatilities on Neste Oyj and Saras SpA 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 Neste Oyj with a short position of Saras SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and Saras SpA.
Diversification Opportunities for Neste Oyj and Saras SpA
Pay attention - limited upside
The 3 months correlation between Neste and Saras is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and Saras SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saras SpA ADR and Neste 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 Neste Oyj are associated (or correlated) with Saras SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saras SpA ADR has no effect on the direction of Neste Oyj i.e., Neste Oyj and Saras SpA go up and down completely randomly.
Pair Corralation between Neste Oyj and Saras SpA
If you would invest 1,308 in Neste Oyj on January 20, 2024 and sell it today you would earn a total of 56.00 from holding Neste Oyj or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Neste Oyj vs. Saras SpA ADR
Performance |
| Timeline |
| Neste Oyj |
| Saras SpA ADR |
Neste Oyj and Saras SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neste Oyj and Saras SpA
The main advantage of trading using opposite Neste Oyj and Saras SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, Saras SpA 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 Saras SpA will offset losses from the drop in Saras SpA's long position.| Neste Oyj vs. Delek Energy | Neste Oyj vs. PBF Energy | Neste Oyj vs. HF Sinclair Corp | Neste Oyj vs. Delek Logistics Partners |
| Saras SpA vs. Delek Energy | Saras SpA vs. PBF Energy | Saras SpA vs. HF Sinclair Corp | Saras SpA vs. Delek Logistics Partners |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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