Correlation Between Saga Furs and Raute Oyj

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

Diversification Opportunities for Saga Furs and Raute Oyj

-0.1

Correlation Coefficient

Saga Furs  Raute Oyj

Good diversification

The 3 months correlation between Saga and Raute is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Saga Furs Oyj and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute 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 Raute Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raute Oyj has no effect on the direction of Saga Furs i.e., Saga Furs and Raute Oyj go up and down completely randomly.

Pair Corralation between Saga Furs and Raute Oyj

If you would invest (100.00) in Raute Oyj on October 21, 2024 and sell it today you would earn a total of  100.00  from holding Raute Oyj or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Saga Furs Oyj  vs.  Raute Oyj

Saga Furs Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saga Furs Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Saga Furs is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Raute Oyj

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Raute Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak technical indicators, Raute Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saga Furs and Raute Oyj

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

The idea behind Saga Furs Oyj and Raute 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 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.