Correlation Between Spinnova and Exel Composites

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

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

Diversification Opportunities for Spinnova and Exel Composites

-0.82

Correlation Coefficient

Spinnova  Exel Composites

Pay attention - limited upside

The 3 months correlation between Spinnova and Exel is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Spinnova Oy and Exel Composites Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Composites Oyj and Spinnova 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 Spinnova Oy are associated (or correlated) with Exel Composites. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Composites Oyj has no effect on the direction of Spinnova i.e., Spinnova and Exel Composites go up and down completely randomly.

Pair Corralation between Spinnova and Exel Composites

Assuming the 90 days trading horizon Spinnova Oy is expected to under-perform the Exel Composites. In addition to that, Spinnova is 2.17 times more volatile than Exel Composites Oyj. It trades about -0.11 of its total potential returns per unit of risk. Exel Composites Oyj is currently generating about 0.21 per unit of volatility. If you would invest  28.00  in Exel Composites Oyj on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Exel Composites Oyj or generate 42.86% return on investment over 90 days.

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

Spinnova Oy  vs.  Exel Composites Oyj

Spinnova Oy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spinnova Oy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Exel Composites Oyj

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exel Composites Oyj are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Exel Composites demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spinnova and Exel Composites

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

The idea behind Spinnova Oy and Exel Composites 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.