Correlation Between Saga Furs and Lassila Tikanoja
Can any of the company-specific risk be diversified away by investing in both Saga Furs and Lassila Tikanoja 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 Saga Furs and Lassila Tikanoja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saga Furs Oyj and Lassila Tikanoja Oyj, you can compare the effects of market volatilities on Saga Furs and Lassila Tikanoja 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 Saga Furs with a short position of Lassila Tikanoja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saga Furs and Lassila Tikanoja.
Diversification Opportunities for Saga Furs and Lassila Tikanoja
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saga and Lassila is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Saga Furs Oyj and Lassila Tikanoja Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassila Tikanoja Oyj and Saga Furs 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 Saga Furs Oyj are associated (or correlated) with Lassila Tikanoja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassila Tikanoja Oyj has no effect on the direction of Saga Furs i.e., Saga Furs and Lassila Tikanoja go up and down completely randomly.
Pair Corralation between Saga Furs and Lassila Tikanoja
Assuming the 90 days trading horizon Saga Furs Oyj is expected to generate 2.36 times more return on investment than Lassila Tikanoja. However, Saga Furs is 2.36 times more volatile than Lassila Tikanoja Oyj. It trades about 0.02 of its potential returns per unit of risk. Lassila Tikanoja Oyj is currently generating about -0.04 per unit of risk. If you would invest 826.00 in Saga Furs Oyj on October 3, 2024 and sell it today you would earn a total of 29.00 from holding Saga Furs Oyj or generate 3.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Saga Furs Oyj vs. Lassila Tikanoja Oyj
Performance |
Timeline |
Saga Furs Oyj |
Lassila Tikanoja Oyj |
Saga Furs and Lassila Tikanoja Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saga Furs and Lassila Tikanoja
The main advantage of trading using opposite Saga Furs and Lassila Tikanoja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saga Furs position performs unexpectedly, Lassila Tikanoja 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 Lassila Tikanoja will offset losses from the drop in Lassila Tikanoja's long position.Saga Furs vs. Raute Oyj | Saga Furs vs. Nurminen Logistics Oyj | Saga Furs vs. Exel Composites Oyj | Saga Furs vs. Dovre Group Plc |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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