Correlation Between Bittium Oyj and Componenta Corp
Can any of the company-specific risk be diversified away by investing in both Bittium Oyj and Componenta Corp 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 Componenta Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bittium Oyj and Componenta Corp, you can compare the effects of market volatilities on Bittium Oyj and Componenta Corp 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 Componenta Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bittium Oyj and Componenta Corp.
Diversification Opportunities for Bittium Oyj and Componenta Corp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bittium and Componenta is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bittium Oyj and Componenta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Componenta Corp 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 Componenta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Componenta Corp has no effect on the direction of Bittium Oyj i.e., Bittium Oyj and Componenta Corp go up and down completely randomly.
Pair Corralation between Bittium Oyj and Componenta Corp
Assuming the 90 days trading horizon Bittium Oyj is expected to generate 0.73 times more return on investment than Componenta Corp. However, Bittium Oyj is 1.37 times less risky than Componenta Corp. It trades about 0.07 of its potential returns per unit of risk. Componenta Corp is currently generating about -0.15 per unit of risk. If you would invest 646.00 in Bittium Oyj on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Bittium Oyj or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bittium Oyj vs. Componenta Corp
Performance |
| Timeline |
| Bittium Oyj |
| Componenta Corp |
Bittium Oyj and Componenta Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bittium Oyj and Componenta Corp
The main advantage of trading using opposite Bittium Oyj and Componenta Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bittium Oyj position performs unexpectedly, Componenta Corp 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 Componenta Corp will offset losses from the drop in Componenta Corp's long position.| Bittium Oyj vs. Tecnotree Oyj | Bittium Oyj vs. Qt Group Oyj | Bittium Oyj vs. Harvia Oyj | Bittium Oyj vs. Kamux Suomi Oy |
| Componenta Corp vs. Dovre Group Plc | Componenta Corp vs. Tecnotree Oyj | Componenta Corp vs. Bittium Oyj | Componenta Corp vs. Afarak Group 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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