Correlation Between Altia Oyj and Food Life
Can any of the company-specific risk be diversified away by investing in both Altia Oyj and Food Life 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 Altia Oyj and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altia Oyj and Food Life Companies, you can compare the effects of market volatilities on Altia Oyj and Food Life 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 Altia Oyj with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altia Oyj and Food Life.
Diversification Opportunities for Altia Oyj and Food Life
Pay attention - limited upside
The 3 months correlation between Altia and Food is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Altia Oyj and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and Altia Oyj 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 Altia Oyj are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of Altia Oyj i.e., Altia Oyj and Food Life go up and down completely randomly.
Pair Corralation between Altia Oyj and Food Life
Assuming the 90 days horizon Altia Oyj is expected to under-perform the Food Life. But the stock apears to be less risky and, when comparing its historical volatility, Altia Oyj is 1.14 times less risky than Food Life. The stock trades about -0.05 of its potential returns per unit of risk. The Food Life Companies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,710 in Food Life Companies on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Food Life Companies or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altia Oyj vs. Food Life Companies
Performance |
| Timeline |
| Altia Oyj |
| Food Life Companies |
Altia Oyj and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altia Oyj and Food Life
The main advantage of trading using opposite Altia Oyj and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altia Oyj position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| Altia Oyj vs. Food Life Companies | Altia Oyj vs. OURGAME INTHOLDL 00005 | Altia Oyj vs. Associated British Foods | Altia Oyj vs. PT Indofood Sukses |
| Food Life vs. Starbucks | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. NorAm Drilling AS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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