Correlation Between ANT and YIT Oyj

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

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

Diversification Opportunities for ANT and YIT Oyj

-0.08

Correlation Coefficient

ANT  YIT Oyj

Good diversification

The 3 months correlation between ANT and YIT is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ANT and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT Oyj and ANT 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 ANT are associated (or correlated) with YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of ANT i.e., ANT and YIT Oyj go up and down completely randomly.

Pair Corralation between ANT and YIT Oyj

Assuming the 90 days trading horizon ANT is expected to generate 10.12 times more return on investment than YIT Oyj. However, ANT is 10.12 times more volatile than YIT Oyj. It trades about 0.09 of its potential returns per unit of risk. YIT Oyj is currently generating about -0.1 per unit of risk. If you would invest  147.00  in ANT on October 25, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

ANT  vs.  YIT Oyj

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

YIT Oyj

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YIT Oyj are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, YIT Oyj is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ANT and YIT Oyj

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

The idea behind ANT and YIT Oyj 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.