Correlation Between TietoEVRY Corp and Sitowise Group
Can any of the company-specific risk be diversified away by investing in both TietoEVRY Corp and Sitowise 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 TietoEVRY Corp and Sitowise Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TietoEVRY Corp and Sitowise Group Oyj, you can compare the effects of market volatilities on TietoEVRY Corp and Sitowise 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 TietoEVRY Corp with a short position of Sitowise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TietoEVRY Corp and Sitowise Group.
Diversification Opportunities for TietoEVRY Corp and Sitowise Group
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TietoEVRY and Sitowise is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding TietoEVRY Corp and Sitowise Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitowise Group Oyj and TietoEVRY Corp 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 TietoEVRY Corp are associated (or correlated) with Sitowise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitowise Group Oyj has no effect on the direction of TietoEVRY Corp i.e., TietoEVRY Corp and Sitowise Group go up and down completely randomly.
Pair Corralation between TietoEVRY Corp and Sitowise Group
Assuming the 90 days trading horizon TietoEVRY Corp is expected to under-perform the Sitowise Group. But the stock apears to be less risky and, when comparing its historical volatility, TietoEVRY Corp is 1.94 times less risky than Sitowise Group. The stock trades about -0.03 of its potential returns per unit of risk. The Sitowise Group Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 243.00 in Sitowise Group Oyj on September 6, 2024 and sell it today you would earn a total of 17.00 from holding Sitowise Group Oyj or generate 7.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TietoEVRY Corp vs. Sitowise Group Oyj
Performance |
Timeline |
TietoEVRY Corp |
Sitowise Group Oyj |
TietoEVRY Corp and Sitowise Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TietoEVRY Corp and Sitowise Group
The main advantage of trading using opposite TietoEVRY Corp and Sitowise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TietoEVRY Corp position performs unexpectedly, Sitowise 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 Sitowise Group will offset losses from the drop in Sitowise Group's long position.TietoEVRY Corp vs. Sampo Oyj A | TietoEVRY Corp vs. Valmet Oyj | TietoEVRY Corp vs. Nordea Bank Abp | TietoEVRY Corp vs. Fortum Oyj |
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Check out your portfolio center.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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