Correlation Between Fiskars Oyj and ADRIATIC METALS

Can any of the company-specific risk be diversified away by investing in both Fiskars Oyj and ADRIATIC METALS 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 Fiskars Oyj and ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fiskars Oyj Abp and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Fiskars Oyj and ADRIATIC METALS 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 Fiskars Oyj with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiskars Oyj and ADRIATIC METALS.

Diversification Opportunities for Fiskars Oyj and ADRIATIC METALS

-0.04

Correlation Coefficient

Fiskars Oyj  ADRIATIC METALS

Good diversification

The 3 months correlation between Fiskars and ADRIATIC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fiskars Oyj Abp and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and Fiskars 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 Fiskars Oyj Abp are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Fiskars Oyj i.e., Fiskars Oyj and ADRIATIC METALS go up and down completely randomly.

Pair Corralation between Fiskars Oyj and ADRIATIC METALS

Assuming the 90 days horizon Fiskars Oyj Abp is expected to generate 0.59 times more return on investment than ADRIATIC METALS. However, Fiskars Oyj Abp is 1.69 times less risky than ADRIATIC METALS. It trades about 0.1 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about -0.12 per unit of risk. If you would invest  1,406  in Fiskars Oyj Abp on October 12, 2024 and sell it today you would earn a total of  42.00  from holding Fiskars Oyj Abp or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Fiskars Oyj Abp  vs.  ADRIATIC METALS LS 013355

Fiskars Oyj Abp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Fiskars Oyj Abp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fiskars Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ADRIATIC METALS LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ADRIATIC METALS LS 013355 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ADRIATIC METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fiskars Oyj and ADRIATIC METALS

The main advantage of trading using opposite Fiskars Oyj and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiskars Oyj position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.

The idea behind Fiskars Oyj Abp and ADRIATIC METALS LS 013355 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.