Correlation Between Stellar and Citycon Oyj

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

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

Diversification Opportunities for Stellar and Citycon Oyj

0.27

Correlation Coefficient

Stellar  Citycon Oyj

Modest diversification

The 3 months correlation between Stellar and Citycon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj and Stellar 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 Stellar are associated (or correlated) with Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of Stellar i.e., Stellar and Citycon Oyj go up and down completely randomly.

Pair Corralation between Stellar and Citycon Oyj

Assuming the 90 days trading horizon Stellar is expected to under-perform the Citycon Oyj. In addition to that, Stellar is 3.0 times more volatile than Citycon Oyj. It trades about -0.06 of its total potential returns per unit of risk. Citycon Oyj is currently generating about 0.04 per unit of volatility. If you would invest  309.00  in Citycon Oyj on December 21, 2024 and sell it today you would earn a total of  11.00  from holding Citycon Oyj or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Stellar  vs.  Citycon Oyj

Stellar

Risk-Adjusted Performance

Very Weak

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

Citycon Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Citycon Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Citycon Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Stellar and Citycon Oyj

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

The idea behind Stellar and Citycon 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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.