Correlation Between Exsitec Holding and TietoEVRY Corp
Can any of the company-specific risk be diversified away by investing in both Exsitec Holding and TietoEVRY Corp 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 Exsitec Holding and TietoEVRY Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exsitec Holding AB and TietoEVRY Corp, you can compare the effects of market volatilities on Exsitec Holding and TietoEVRY Corp 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 Exsitec Holding with a short position of TietoEVRY Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exsitec Holding and TietoEVRY Corp.
Diversification Opportunities for Exsitec Holding and TietoEVRY Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exsitec and TietoEVRY is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and TietoEVRY Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Corp and Exsitec Holding 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 Exsitec Holding AB are associated (or correlated) with TietoEVRY Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TietoEVRY Corp has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and TietoEVRY Corp go up and down completely randomly.
Pair Corralation between Exsitec Holding and TietoEVRY Corp
Assuming the 90 days trading horizon Exsitec Holding AB is expected to generate 1.24 times more return on investment than TietoEVRY Corp. However, Exsitec Holding is 1.24 times more volatile than TietoEVRY Corp. It trades about 0.21 of its potential returns per unit of risk. TietoEVRY Corp is currently generating about 0.09 per unit of risk. If you would invest 10,840 in Exsitec Holding AB on April 22, 2025 and sell it today you would earn a total of 2,710 from holding Exsitec Holding AB or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Exsitec Holding AB vs. TietoEVRY Corp
Performance |
Timeline |
Exsitec Holding AB |
TietoEVRY Corp |
Exsitec Holding and TietoEVRY Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exsitec Holding and TietoEVRY Corp
The main advantage of trading using opposite Exsitec Holding and TietoEVRY Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exsitec Holding position performs unexpectedly, TietoEVRY Corp 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 TietoEVRY Corp will offset losses from the drop in TietoEVRY Corp's long position.Exsitec Holding vs. Peab AB | Exsitec Holding vs. Wallenstam AB | Exsitec Holding vs. HEXPOL AB | Exsitec Holding vs. Holmen AB |
TietoEVRY Corp vs. Peab AB | TietoEVRY Corp vs. Wallenstam AB | TietoEVRY Corp vs. HEXPOL AB | TietoEVRY Corp vs. Holmen AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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