Correlation Between Bittium Oyj and Afarak Group
Can any of the company-specific risk be diversified away by investing in both Bittium Oyj and Afarak Group 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 Bittium Oyj and Afarak Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bittium Oyj and Afarak Group Oyj, you can compare the effects of market volatilities on Bittium Oyj and Afarak Group 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 Bittium Oyj with a short position of Afarak Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bittium Oyj and Afarak Group.
Diversification Opportunities for Bittium Oyj and Afarak Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bittium and Afarak is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bittium Oyj and Afarak Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afarak Group Oyj and Bittium 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 Bittium Oyj are associated (or correlated) with Afarak Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afarak Group Oyj has no effect on the direction of Bittium Oyj i.e., Bittium Oyj and Afarak Group go up and down completely randomly.
Pair Corralation between Bittium Oyj and Afarak Group
Assuming the 90 days trading horizon Bittium Oyj is expected to generate 0.89 times more return on investment than Afarak Group. However, Bittium Oyj is 1.12 times less risky than Afarak Group. It trades about 0.04 of its potential returns per unit of risk. Afarak Group Oyj is currently generating about -0.06 per unit of risk. If you would invest 605.00 in Bittium Oyj on September 3, 2024 and sell it today you would earn a total of 63.00 from holding Bittium Oyj or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bittium Oyj vs. Afarak Group Oyj
Performance |
| Timeline |
| Bittium Oyj |
| Afarak Group Oyj |
Bittium Oyj and Afarak Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bittium Oyj and Afarak Group
The main advantage of trading using opposite Bittium Oyj and Afarak Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bittium Oyj position performs unexpectedly, Afarak Group 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 Afarak Group will offset losses from the drop in Afarak Group's long position.| Bittium Oyj vs. Revenio Group | Bittium Oyj vs. Outokumpu Oyj | Bittium Oyj vs. Qt Group Oyj | Bittium Oyj vs. CapMan Oyj B |
| Afarak Group vs. Outokumpu Oyj | Afarak Group vs. Sotkamo Silver AB | Afarak Group vs. SSAB AB ser | Afarak Group vs. Bittium Oyj |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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