Correlation Between Sitowise Group and Exel Composites
Can any of the company-specific risk be diversified away by investing in both Sitowise 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 Sitowise 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 Sitowise Group Oyj and Exel Composites Oyj, you can compare the effects of market volatilities on Sitowise 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 Sitowise Group with a short position of Exel Composites. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitowise Group and Exel Composites.
Diversification Opportunities for Sitowise Group and Exel Composites
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitowise and Exel is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sitowise 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 Sitowise 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 Sitowise 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 Sitowise Group i.e., Sitowise Group and Exel Composites go up and down completely randomly.
Pair Corralation between Sitowise Group and Exel Composites
Assuming the 90 days trading horizon Sitowise Group Oyj is expected to generate 1.05 times more return on investment than Exel Composites. However, Sitowise Group is 1.05 times more volatile than Exel Composites Oyj. It trades about 0.1 of its potential returns per unit of risk. Exel Composites Oyj is currently generating about 0.06 per unit of risk. If you would invest 241.00 in Sitowise Group Oyj on September 8, 2024 and sell it today you would earn a total of 15.00 from holding Sitowise Group Oyj or generate 6.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sitowise Group Oyj vs. Exel Composites Oyj
Performance |
Timeline |
Sitowise Group Oyj |
Exel Composites Oyj |
Sitowise Group and Exel Composites Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sitowise Group and Exel Composites
The main advantage of trading using opposite Sitowise Group and Exel Composites positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitowise 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.Sitowise Group vs. TietoEVRY Corp | Sitowise Group vs. Tokmanni Group Oyj | Sitowise Group vs. Harvia Oyj | Sitowise Group vs. Puuilo Oyj |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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