Correlation Between Exel Composites and Wulff Yhtiot

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Can any of the company-specific risk be diversified away by investing in both Exel Composites 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 Exel Composites and Wulff Yhtiot 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 Wulff Yhtiot Oy, you can compare the effects of market volatilities on Exel Composites 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 Exel Composites with a short position of Wulff Yhtiot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Wulff Yhtiot.

Diversification Opportunities for Exel Composites and Wulff Yhtiot

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Exel and Wulff is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj 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 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 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 Exel Composites i.e., Exel Composites and Wulff Yhtiot go up and down completely randomly.

Pair Corralation between Exel Composites and Wulff Yhtiot

Assuming the 90 days trading horizon Exel Composites Oyj is expected to generate 1.51 times more return on investment than Wulff Yhtiot. However, Exel Composites is 1.51 times more volatile than Wulff Yhtiot Oy. It trades about 0.33 of its potential returns per unit of risk. Wulff Yhtiot Oy is currently generating about 0.03 per unit of risk. If you would invest  28.00  in Exel Composites Oyj on October 24, 2024 and sell it today you would earn a total of  4.00  from holding Exel Composites Oyj or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.12%
ValuesDaily Returns

Exel Composites Oyj  vs.  Wulff Yhtiot Oy

 Performance 
       Timeline  
Exel Composites Oyj 

Risk-Adjusted Performance

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Over the last 90 days Exel Composites Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady 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.
Wulff Yhtiot Oy 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Wulff Yhtiot Oy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Wulff Yhtiot is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Exel Composites and Wulff Yhtiot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Exel Composites and Wulff Yhtiot

The main advantage of trading using opposite Exel Composites and Wulff Yhtiot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Composites 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 Exel Composites Oyj 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.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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