Correlation Between Taaleri Oyj and SSAB AB

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

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

Diversification Opportunities for Taaleri Oyj and SSAB AB

0.51

Correlation Coefficient

Taaleri Oyj  SSAB AB

Very weak diversification

The 3 months correlation between Taaleri and SSAB is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Taaleri Oyj and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser and Taaleri Oyj 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 Taaleri Oyj are associated (or correlated) with SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Taaleri Oyj i.e., Taaleri Oyj and SSAB AB go up and down completely randomly.

Pair Corralation between Taaleri Oyj and SSAB AB

Assuming the 90 days trading horizon Taaleri Oyj is expected to under-perform the SSAB AB. But the stock apears to be less risky and, when comparing its historical volatility, Taaleri Oyj is 1.26 times less risky than SSAB AB. The stock trades about -0.1 of its potential returns per unit of risk. The SSAB AB ser is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  383.00  in SSAB AB ser on October 25, 2024 and sell it today you would earn a total of  3.00  from holding SSAB AB ser or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Taaleri Oyj  vs.  SSAB AB ser

Taaleri Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

SSAB AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSAB AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Taaleri Oyj and SSAB AB

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

The idea behind Taaleri Oyj and SSAB AB ser 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.