Correlation Between UPM Kymmene and INDO-RAMA SYNTHETIC

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Can any of the company-specific risk be diversified away by investing in both UPM Kymmene and INDO-RAMA SYNTHETIC 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 UPM Kymmene and INDO-RAMA SYNTHETIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPM Kymmene Oyj and INDO RAMA SYNTHETIC, you can compare the effects of market volatilities on UPM Kymmene and INDO-RAMA SYNTHETIC 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 UPM Kymmene with a short position of INDO-RAMA SYNTHETIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPM Kymmene and INDO-RAMA SYNTHETIC.

Diversification Opportunities for UPM Kymmene and INDO-RAMA SYNTHETIC

UPMINDO-RAMADiversified AwayUPMINDO-RAMADiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between UPM and INDO-RAMA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UPM Kymmene Oyj and INDO RAMA SYNTHETIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDO RAMA SYNTHETIC and UPM Kymmene 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 UPM Kymmene Oyj are associated (or correlated) with INDO-RAMA SYNTHETIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDO RAMA SYNTHETIC has no effect on the direction of UPM Kymmene i.e., UPM Kymmene and INDO-RAMA SYNTHETIC go up and down completely randomly.

Pair Corralation between UPM Kymmene and INDO-RAMA SYNTHETIC

If you would invest  21.00  in INDO RAMA SYNTHETIC on September 22, 2024 and sell it today you would earn a total of  0.00  from holding INDO RAMA SYNTHETIC or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

UPM Kymmene Oyj  vs.  INDO RAMA SYNTHETIC

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-50
JavaScript chart by amCharts 3.21.15RPL 59I
       Timeline  
UPM Kymmene Oyj 

Risk-Adjusted Performance

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Over the last 90 days UPM Kymmene Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2526272829
INDO RAMA SYNTHETIC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO-RAMA SYNTHETIC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.210.215

UPM Kymmene and INDO-RAMA SYNTHETIC Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.45-1.87-1.3-0.72-0.140.420.991.562.132.7 0.050.100.15
JavaScript chart by amCharts 3.21.15RPL 59I
       Returns  

Pair Trading with UPM Kymmene and INDO-RAMA SYNTHETIC

The main advantage of trading using opposite UPM Kymmene and INDO-RAMA SYNTHETIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPM Kymmene position performs unexpectedly, INDO-RAMA SYNTHETIC 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 INDO-RAMA SYNTHETIC will offset losses from the drop in INDO-RAMA SYNTHETIC's long position.
The idea behind UPM Kymmene Oyj and INDO RAMA SYNTHETIC 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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