Correlation Between Evli Pankki and Citycon Oyj

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

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

Diversification Opportunities for Evli Pankki and Citycon Oyj

0.82

Correlation Coefficient

Evli Pankki  Citycon Oyj

Very poor diversification

The 3 months correlation between Evli and Citycon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Evli Pankki Oyj and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj and Evli Pankki 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 Evli Pankki Oyj are associated (or correlated) with Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of Evli Pankki i.e., Evli Pankki and Citycon Oyj go up and down completely randomly.

Pair Corralation between Evli Pankki and Citycon Oyj

Assuming the 90 days trading horizon Evli Pankki Oyj is expected to generate 0.6 times more return on investment than Citycon Oyj. However, Evli Pankki Oyj is 1.67 times less risky than Citycon Oyj. It trades about -0.13 of its potential returns per unit of risk. Citycon Oyj is currently generating about -0.23 per unit of risk. If you would invest  1,895  in Evli Pankki Oyj on October 3, 2024 and sell it today you would lose (145.00) from holding Evli Pankki Oyj or give up 7.65% of portfolio value over 90 days.

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

Evli Pankki Oyj  vs.  Citycon Oyj

Evli Pankki Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Citycon Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citycon Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Evli Pankki and Citycon Oyj

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

The idea behind Evli Pankki Oyj and Citycon 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.