Correlation Between Detection Technology and Wulff Yhtiot

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

By analyzing existing cross correlation between Detection Technology OY and Wulff Yhtiot Oy, you can compare the effects of market volatilities on Detection Technology and Wulff Yhtiot 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 Detection Technology with a short position of Wulff Yhtiot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Detection Technology and Wulff Yhtiot.

Diversification Opportunities for Detection Technology and Wulff Yhtiot

-0.29

Correlation Coefficient

Detection Technology  Wulff Yhtiot

Very good diversification

The 3 months correlation between Detection and Wulff is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Detection Technology OY and Wulff Yhtiot Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wulff Yhtiot Oy and Detection Technology 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 Detection Technology OY are associated (or correlated) with Wulff Yhtiot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wulff Yhtiot Oy has no effect on the direction of Detection Technology i.e., Detection Technology and Wulff Yhtiot go up and down completely randomly.

Pair Corralation between Detection Technology and Wulff Yhtiot

Assuming the 90 days trading horizon Detection Technology OY is expected to under-perform the Wulff Yhtiot. But the stock apears to be less risky and, when comparing its historical volatility, Detection Technology OY is 1.24 times less risky than Wulff Yhtiot. The stock trades about -0.01 of its potential returns per unit of risk. The Wulff Yhtiot Oy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  318.00  in Wulff Yhtiot Oy on October 10, 2024 and sell it today you would lose (11.00) from holding Wulff Yhtiot Oy or give up 3.46% of portfolio value over 90 days.

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

Detection Technology OY  vs.  Wulff Yhtiot Oy

Detection Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Detection Technology OY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Wulff Yhtiot Oy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wulff Yhtiot Oy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Wulff Yhtiot may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Detection Technology and Wulff Yhtiot

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

The idea behind Detection Technology OY and Wulff Yhtiot Oy 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.