Correlation Between Aspo Oyj and Metso Oyj

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

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

Diversification Opportunities for Aspo Oyj and Metso Oyj

0.0

Correlation Coefficient

Aspo Oyj  Metso Oyj

Pay attention - limited upside

The 3 months correlation between Aspo and Metso is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aspo Oyj and Metso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Oyj and Aspo 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 Aspo Oyj are associated (or correlated) with Metso Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Oyj has no effect on the direction of Aspo Oyj i.e., Aspo Oyj and Metso Oyj go up and down completely randomly.

Pair Corralation between Aspo Oyj and Metso Oyj

If you would invest  0.00  in Aspo Oyj on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Aspo Oyj or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Aspo Oyj  vs.  Metso Oyj

Aspo Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspo Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Aspo Oyj is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Metso Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metso Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Metso Oyj is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aspo Oyj and Metso Oyj

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

The idea behind Aspo Oyj and Metso 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.