Correlation Between Siili Solutions and TietoEVRY Corp

Can any of the company-specific risk be diversified away by investing in both Siili Solutions and TietoEVRY Corp 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 Siili Solutions and TietoEVRY Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Siili Solutions and TietoEVRY Corp

-0.63

Correlation Coefficient

Siili Solutions  TietoEVRY Corp

Excellent diversification

The 3 months correlation between Siili and TietoEVRY is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Siili Solutions Oyj and TietoEVRY Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Corp and Siili Solutions 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 Siili Solutions Oyj are associated (or correlated) with TietoEVRY Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Corp has no effect on the direction of Siili Solutions i.e., Siili Solutions and TietoEVRY Corp go up and down completely randomly.

Pair Corralation between Siili Solutions and TietoEVRY Corp

Assuming the 90 days trading horizon Siili Solutions is expected to generate 1.61 times less return on investment than TietoEVRY Corp. In addition to that, Siili Solutions is 2.05 times more volatile than TietoEVRY Corp. It trades about 0.05 of its total potential returns per unit of risk. TietoEVRY Corp is currently generating about 0.16 per unit of volatility. If you would invest  1,655  in TietoEVRY Corp on November 20, 2024 and sell it today you would earn a total of  203.00  from holding TietoEVRY Corp or generate 12.27% return on investment over 90 days.

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

Siili Solutions Oyj  vs.  TietoEVRY Corp

Siili Solutions Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siili Solutions Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Siili Solutions may actually be approaching a critical reversion point that can send shares even higher in March 2025.

TietoEVRY Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TietoEVRY Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, TietoEVRY Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siili Solutions and TietoEVRY Corp

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

The idea behind Siili Solutions Oyj and TietoEVRY Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..