Correlation Between Metallus, and Outokumpu Oyj

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

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

Diversification Opportunities for Metallus, and Outokumpu Oyj

0.62

Correlation Coefficient

Metallus,  Outokumpu Oyj

Poor diversification

The 3 months correlation between Metallus, and Outokumpu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Metallus, and Outokumpu Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outokumpu Oyj ADR and Metallus, 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 Metallus, are associated (or correlated) with Outokumpu Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outokumpu Oyj ADR has no effect on the direction of Metallus, i.e., Metallus, and Outokumpu Oyj go up and down completely randomly.

Pair Corralation between Metallus, and Outokumpu Oyj

Given the investment horizon of 90 days Metallus, is expected to generate 1.31 times more return on investment than Outokumpu Oyj. However, Metallus, is 1.31 times more volatile than Outokumpu Oyj ADR. It trades about 0.11 of its potential returns per unit of risk. Outokumpu Oyj ADR is currently generating about 0.01 per unit of risk. If you would invest  1,289  in Metallus, on May 7, 2025 and sell it today you would earn a total of  255.00  from holding Metallus, or generate 19.78% return on investment over 90 days.

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

Metallus,  vs.  Outokumpu Oyj ADR

Metallus,

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Metallus, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Metallus, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Outokumpu Oyj ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Outokumpu Oyj ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Outokumpu Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Metallus, and Outokumpu Oyj

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

The idea behind Metallus, and Outokumpu Oyj ADR 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.