Correlation Between Proact IT and TietoEVRY Corp

Can any of the company-specific risk be diversified away by investing in both Proact IT 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 Proact IT and TietoEVRY Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Proact IT Group and TietoEVRY Corp, you can compare the effects of market volatilities on Proact IT 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 Proact IT with a short position of TietoEVRY Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proact IT and TietoEVRY Corp.

Diversification Opportunities for Proact IT and TietoEVRY Corp

-0.71

Correlation Coefficient

Proact IT  TietoEVRY Corp

Pay attention - limited upside

The 3 months correlation between Proact and TietoEVRY is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Proact IT Group and TietoEVRY Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TietoEVRY Corp and Proact IT 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 Proact IT Group 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 Proact IT i.e., Proact IT and TietoEVRY Corp go up and down completely randomly.

Pair Corralation between Proact IT and TietoEVRY Corp

Assuming the 90 days trading horizon Proact IT Group is expected to under-perform the TietoEVRY Corp. In addition to that, Proact IT is 1.22 times more volatile than TietoEVRY Corp. It trades about -0.25 of its total potential returns per unit of risk. TietoEVRY Corp is currently generating about 0.13 per unit of volatility. If you would invest  17,840  in TietoEVRY Corp on April 22, 2025 and sell it today you would earn a total of  710.00  from holding TietoEVRY Corp or generate 3.98% return on investment over 90 days.

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

Proact IT Group  vs.  TietoEVRY Corp

Proact IT Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proact IT Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

TietoEVRY Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TietoEVRY Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, TietoEVRY Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Proact IT and TietoEVRY Corp

The main advantage of trading using opposite Proact IT and TietoEVRY Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proact IT 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.

The idea behind Proact IT Group and TietoEVRY Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.