Correlation Between OPEN HOUSE and Citycon Oyj

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

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

Diversification Opportunities for OPEN HOUSE and Citycon Oyj

0.08

Correlation Coefficient

OPEN HOUSE  Citycon Oyj

Significant diversification

The 3 months correlation between OPEN and Citycon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding OPEN HOUSE GROUP and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj and OPEN HOUSE 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 OPEN HOUSE GROUP 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 OPEN HOUSE i.e., OPEN HOUSE and Citycon Oyj go up and down completely randomly.

Pair Corralation between OPEN HOUSE and Citycon Oyj

Assuming the 90 days horizon OPEN HOUSE GROUP is expected to generate 1.73 times more return on investment than Citycon Oyj. However, OPEN HOUSE is 1.73 times more volatile than Citycon Oyj. It trades about 0.04 of its potential returns per unit of risk. Citycon Oyj is currently generating about -0.05 per unit of risk. If you would invest  2,296  in OPEN HOUSE GROUP on September 23, 2024 and sell it today you would earn a total of  984.00  from holding OPEN HOUSE GROUP or generate 42.86% return on investment over 90 days.

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

OPEN HOUSE GROUP  vs.  Citycon Oyj

OPEN HOUSE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OPEN HOUSE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, OPEN HOUSE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Citycon Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citycon Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with OPEN HOUSE and Citycon Oyj

The main advantage of trading using opposite OPEN HOUSE and Citycon Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPEN HOUSE 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 OPEN HOUSE GROUP 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.