Correlation Between Boreo Oyj and F SECURE

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

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

Diversification Opportunities for Boreo Oyj and F SECURE

-0.83

Correlation Coefficient

Boreo Oyj  F SECURE

Pay attention - limited upside

The 3 months correlation between Boreo and FSECURE is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Boreo Oyj and F SECURE OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F SECURE OYJ and Boreo 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 Boreo Oyj are associated (or correlated) with F SECURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F SECURE OYJ has no effect on the direction of Boreo Oyj i.e., Boreo Oyj and F SECURE go up and down completely randomly.

Pair Corralation between Boreo Oyj and F SECURE

Assuming the 90 days trading horizon Boreo Oyj is expected to generate 3.31 times more return on investment than F SECURE. However, Boreo Oyj is 3.31 times more volatile than F SECURE OYJ. It trades about 0.12 of its potential returns per unit of risk. F SECURE OYJ is currently generating about -0.14 per unit of risk. If you would invest  1,015  in Boreo Oyj on December 24, 2024 and sell it today you would earn a total of  270.00  from holding Boreo Oyj or generate 26.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Boreo Oyj  vs.  F SECURE OYJ

Boreo Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boreo Oyj are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Boreo Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

F SECURE OYJ

Risk-Adjusted Performance

Very Weak

Over the last 90 days F SECURE OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Boreo Oyj and F SECURE

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

The idea behind Boreo Oyj and F SECURE 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.