Correlation Between F SECURE and Digia Oyj

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

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

Diversification Opportunities for F SECURE and Digia Oyj

-0.92

Correlation Coefficient

F SECURE  Digia Oyj

Pay attention - limited upside

The 3 months correlation between FSECURE and Digia is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding F SECURE OYJ and Digia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digia Oyj and F SECURE 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 F SECURE OYJ are associated (or correlated) with Digia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digia Oyj has no effect on the direction of F SECURE i.e., F SECURE and Digia Oyj go up and down completely randomly.

Pair Corralation between F SECURE and Digia Oyj

Assuming the 90 days trading horizon F SECURE OYJ is expected to under-perform the Digia Oyj. In addition to that, F SECURE is 1.06 times more volatile than Digia Oyj. It trades about -0.01 of its total potential returns per unit of risk. Digia Oyj is currently generating about 0.08 per unit of volatility. If you would invest  558.00  in Digia Oyj on October 9, 2024 and sell it today you would earn a total of  120.00  from holding Digia Oyj or generate 21.51% return on investment over 90 days.

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

F SECURE OYJ  vs.  Digia Oyj

F SECURE OYJ

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Digia Oyj

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digia Oyj are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Digia Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with F SECURE and Digia Oyj

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

The idea behind F SECURE OYJ and Digia 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.