Correlation Between Wulff Yhtiot and SSAB AB

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

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

Diversification Opportunities for Wulff Yhtiot and SSAB AB

-0.66

Correlation Coefficient

Wulff Yhtiot  SSAB AB

Excellent diversification

The 3 months correlation between Wulff and SSAB is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wulff Yhtiot Oy 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 Wulff Yhtiot 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 Wulff Yhtiot Oy 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 Wulff Yhtiot i.e., Wulff Yhtiot and SSAB AB go up and down completely randomly.

Pair Corralation between Wulff Yhtiot and SSAB AB

Assuming the 90 days trading horizon Wulff Yhtiot is expected to generate 1.61 times less return on investment than SSAB AB. But when comparing it to its historical volatility, Wulff Yhtiot Oy is 1.1 times less risky than SSAB AB. It trades about 0.1 of its potential returns per unit of risk. SSAB AB ser is currently generating about 0.15 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  18.00  from holding SSAB AB ser or generate 4.7% return on investment over 90 days.

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

Wulff Yhtiot Oy  vs.  SSAB AB ser

Wulff Yhtiot Oy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wulff Yhtiot Oy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Wulff Yhtiot 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 Wulff Yhtiot and SSAB AB

The main advantage of trading using opposite Wulff Yhtiot and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wulff Yhtiot 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 Wulff Yhtiot Oy 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.