Correlation Between Aktia Bank and Raute Oyj
Can any of the company-specific risk be diversified away by investing in both Aktia Bank and Raute 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 Aktia Bank and Raute Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aktia Bank Abp and Raute Oyj, you can compare the effects of market volatilities on Aktia Bank and Raute 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 Aktia Bank with a short position of Raute Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aktia Bank and Raute Oyj.
Diversification Opportunities for Aktia Bank and Raute Oyj
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aktia and Raute is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aktia Bank Abp and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute Oyj and Aktia Bank 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 Aktia Bank Abp are associated (or correlated) with Raute Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raute Oyj has no effect on the direction of Aktia Bank i.e., Aktia Bank and Raute Oyj go up and down completely randomly.
Pair Corralation between Aktia Bank and Raute Oyj
Assuming the 90 days trading horizon Aktia Bank Abp is expected to under-perform the Raute Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Aktia Bank Abp is 4.3 times less risky than Raute Oyj. The stock trades about -0.09 of its potential returns per unit of risk. The Raute Oyj is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,250 in Raute Oyj on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Raute Oyj or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aktia Bank Abp vs. Raute Oyj
Performance |
| Timeline |
| Aktia Bank Abp |
| Raute Oyj |
Aktia Bank and Raute Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aktia Bank and Raute Oyj
The main advantage of trading using opposite Aktia Bank and Raute Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aktia Bank position performs unexpectedly, Raute 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 Raute Oyj will offset losses from the drop in Raute Oyj's long position.| Aktia Bank vs. Alandsbanken Abp B | Aktia Bank vs. CapMan Oyj B | Aktia Bank vs. Tokmanni Group Oyj | Aktia Bank vs. Oma Saastopankki Oyj |
| Raute Oyj vs. Telefonaktiebolaget LM Ericsson | Raute Oyj vs. SSAB AB ser | Raute Oyj vs. SSAB AB ser | Raute Oyj vs. Telia Company 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |