Correlation Between Vaisala Oyj and F SECURE

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

By analyzing existing cross correlation between Vaisala Oyj A and F SECURE OYJ, you can compare the effects of market volatilities on Vaisala Oyj and F SECURE 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 Vaisala Oyj with a short position of F SECURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaisala Oyj and F SECURE.

Diversification Opportunities for Vaisala Oyj and F SECURE

-0.53

Correlation Coefficient

Vaisala Oyj  F SECURE

Excellent diversification

The 3 months correlation between Vaisala and FSECURE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vaisala Oyj A and F SECURE OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F SECURE OYJ and Vaisala 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 Vaisala Oyj A are associated (or correlated) with F SECURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F SECURE OYJ has no effect on the direction of Vaisala Oyj i.e., Vaisala Oyj and F SECURE go up and down completely randomly.

Pair Corralation between Vaisala Oyj and F SECURE

Assuming the 90 days trading horizon Vaisala Oyj A is expected to generate 1.83 times more return on investment than F SECURE. However, Vaisala Oyj is 1.83 times more volatile than F SECURE OYJ. It trades about 0.14 of its potential returns per unit of risk. F SECURE OYJ is currently generating about -0.1 per unit of risk. If you would invest  4,820  in Vaisala Oyj A on October 25, 2024 and sell it today you would earn a total of  530.00  from holding Vaisala Oyj A or generate 11.0% return on investment over 90 days.

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

Vaisala Oyj A  vs.  F SECURE OYJ

Vaisala Oyj A

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vaisala Oyj A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Vaisala Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

F SECURE OYJ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days F SECURE OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vaisala Oyj and F SECURE

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

The idea behind Vaisala Oyj A and F SECURE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.