Correlation Between Traton SE and Metso Outotec
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By analyzing existing cross correlation between Traton SE and Metso Outotec Oyj, you can compare the effects of market volatilities on Traton SE and Metso Outotec 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 Traton SE with a short position of Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traton SE and Metso Outotec.
Diversification Opportunities for Traton SE and Metso Outotec
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Traton and Metso is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE and Metso Outotec Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec Oyj and Traton SE 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 Traton SE are associated (or correlated) with Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Oyj has no effect on the direction of Traton SE i.e., Traton SE and Metso Outotec go up and down completely randomly.
Pair Corralation between Traton SE and Metso Outotec
Assuming the 90 days trading horizon Traton SE is expected to generate 0.99 times more return on investment than Metso Outotec. However, Traton SE is 1.01 times less risky than Metso Outotec. It trades about 0.08 of its potential returns per unit of risk. Metso Outotec Oyj is currently generating about 0.01 per unit of risk. If you would invest 1,325 in Traton SE on September 23, 2024 and sell it today you would earn a total of 1,435 from holding Traton SE or generate 108.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Traton SE vs. Metso Outotec Oyj
Performance |
Timeline |
Traton SE |
Metso Outotec Oyj |
Traton SE and Metso Outotec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Traton SE and Metso Outotec
The main advantage of trading using opposite Traton SE and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traton SE position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.The idea behind Traton SE and Metso Outotec 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.Metso Outotec vs. Caterpillar | Metso Outotec vs. Caterpillar | Metso Outotec vs. Deere Company | Metso Outotec vs. AB Volvo |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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