Correlation Between Exel Composites and Sanoma Oyj

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

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

Diversification Opportunities for Exel Composites and Sanoma Oyj

-0.79

Correlation Coefficient

Exel Composites  Sanoma Oyj

Pay attention - limited upside

The 3 months correlation between Exel and Sanoma is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Sanoma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanoma Oyj and Exel Composites 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 Exel Composites Oyj are associated (or correlated) with Sanoma Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanoma Oyj has no effect on the direction of Exel Composites i.e., Exel Composites and Sanoma Oyj go up and down completely randomly.

Pair Corralation between Exel Composites and Sanoma Oyj

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Sanoma Oyj. In addition to that, Exel Composites is 1.92 times more volatile than Sanoma Oyj. It trades about -0.08 of its total potential returns per unit of risk. Sanoma Oyj is currently generating about 0.18 per unit of volatility. If you would invest  642.00  in Sanoma Oyj on September 16, 2024 and sell it today you would earn a total of  116.00  from holding Sanoma Oyj or generate 18.07% return on investment over 90 days.

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

Exel Composites Oyj  vs.  Sanoma Oyj

Exel Composites Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exel Composites Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sanoma Oyj

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sanoma Oyj are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Sanoma Oyj sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exel Composites and Sanoma Oyj

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

The idea behind Exel Composites Oyj and Sanoma 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.