Correlation Between SSH Communications and Purmo Group

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

By analyzing existing cross correlation between SSH Communications Security and Purmo Group Oyj, you can compare the effects of market volatilities on SSH Communications and Purmo Group 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 SSH Communications with a short position of Purmo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Purmo Group.

Diversification Opportunities for SSH Communications and Purmo Group

0.0

Correlation Coefficient

SSH Communications  Purmo Group

Pay attention - limited upside

The 3 months correlation between SSH and Purmo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Purmo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purmo Group Oyj and SSH Communications 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 SSH Communications Security are associated (or correlated) with Purmo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purmo Group Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Purmo Group go up and down completely randomly.

Pair Corralation between SSH Communications and Purmo Group

If you would invest (100.00) in Purmo Group Oyj on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Purmo Group Oyj or generate -100.0% return on investment over 90 days.

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

SSH Communications Security  vs.  Purmo Group Oyj

SSH Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSH Communications Security has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Purmo Group Oyj

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with SSH Communications and Purmo Group

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

The idea behind SSH Communications Security and Purmo Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.