Correlation Between Alandsbanken Abp and Kempower Oyj
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By analyzing existing cross correlation between Alandsbanken Abp B and Kempower Oyj, you can compare the effects of market volatilities on Alandsbanken Abp and Kempower 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 Alandsbanken Abp with a short position of Kempower Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alandsbanken Abp and Kempower Oyj.
Diversification Opportunities for Alandsbanken Abp and Kempower Oyj
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alandsbanken and Kempower is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alandsbanken Abp B and Kempower Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kempower Oyj and Alandsbanken Abp 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 Alandsbanken Abp B are associated (or correlated) with Kempower Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kempower Oyj has no effect on the direction of Alandsbanken Abp i.e., Alandsbanken Abp and Kempower Oyj go up and down completely randomly.
Pair Corralation between Alandsbanken Abp and Kempower Oyj
Assuming the 90 days trading horizon Alandsbanken Abp B is expected to generate 0.26 times more return on investment than Kempower Oyj. However, Alandsbanken Abp B is 3.84 times less risky than Kempower Oyj. It trades about -0.15 of its potential returns per unit of risk. Kempower Oyj is currently generating about -0.2 per unit of risk. If you would invest 3,400 in Alandsbanken Abp B on August 29, 2024 and sell it today you would lose (90.00) from holding Alandsbanken Abp B or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alandsbanken Abp B vs. Kempower Oyj
Performance |
| Timeline |
| Alandsbanken Abp B |
| Kempower Oyj |
Alandsbanken Abp and Kempower Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alandsbanken Abp and Kempower Oyj
The main advantage of trading using opposite Alandsbanken Abp and Kempower Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alandsbanken Abp position performs unexpectedly, Kempower 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 Kempower Oyj will offset losses from the drop in Kempower Oyj's long position.| Alandsbanken Abp vs. Nordea Bank Abp | Alandsbanken Abp vs. Fortum Oyj | Alandsbanken Abp vs. UPM Kymmene Oyj | Alandsbanken Abp vs. Neste Oil Oyj |
| Kempower Oyj vs. Oma Saastopankki Oyj | Kempower Oyj vs. Tecnotree Oyj | Kempower Oyj vs. Tokmanni Group Oyj | Kempower Oyj vs. Vaisala Oyj A |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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