Correlation Between Exel Composites and EcoUp Oyj

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

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

Diversification Opportunities for Exel Composites and EcoUp Oyj

0.82

Correlation Coefficient

Exel Composites  EcoUp Oyj

Very poor diversification

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

Pair Corralation between Exel Composites and EcoUp Oyj

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the EcoUp Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Exel Composites Oyj is 1.42 times less risky than EcoUp Oyj. The stock trades about -0.19 of its potential returns per unit of risk. The EcoUp Oyj is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  204.00  in EcoUp Oyj on September 28, 2024 and sell it today you would lose (24.00) from holding EcoUp Oyj or give up 11.76% of portfolio value over 90 days.

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

Exel Composites Oyj  vs.  EcoUp Oyj

Exel Composites Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exel Composites 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

EcoUp Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EcoUp Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with Exel Composites and EcoUp Oyj

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

The idea behind Exel Composites Oyj and EcoUp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.