Correlation Between WIMFARM SA and Stora Enso
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and Stora Enso 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 WIMFARM SA and Stora Enso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and Stora Enso Oyj, you can compare the effects of market volatilities on WIMFARM SA and Stora Enso 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 WIMFARM SA with a short position of Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and Stora Enso.
Diversification Opportunities for WIMFARM SA and Stora Enso
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIMFARM and Stora is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and Stora Enso go up and down completely randomly.
Pair Corralation between WIMFARM SA and Stora Enso
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 2.25 times more return on investment than Stora Enso. However, WIMFARM SA is 2.25 times more volatile than Stora Enso Oyj. It trades about 0.03 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.14 per unit of risk. If you would invest 350.00 in WIMFARM SA EO on September 19, 2024 and sell it today you would earn a total of 12.00 from holding WIMFARM SA EO or generate 3.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
WIMFARM SA EO vs. Stora Enso Oyj
Performance |
Timeline |
WIMFARM SA EO |
Stora Enso Oyj |
WIMFARM SA and Stora Enso Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WIMFARM SA and Stora Enso
The main advantage of trading using opposite WIMFARM SA and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso's long position.WIMFARM SA vs. AB Volvo | WIMFARM SA vs. Daimler Truck Holding | WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
Stora Enso vs. Sumitomo Mitsui Construction | Stora Enso vs. Dairy Farm International | Stora Enso vs. Ebro Foods SA | Stora Enso vs. WIMFARM SA EO |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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