Correlation Between Bittium Oyj and Revenio
Can any of the company-specific risk be diversified away by investing in both Bittium Oyj and Revenio 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 Revenio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bittium Oyj and Revenio Group, you can compare the effects of market volatilities on Bittium Oyj and Revenio 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 Revenio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bittium Oyj and Revenio.
Diversification Opportunities for Bittium Oyj and Revenio
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bittium and Revenio is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bittium Oyj and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group 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 Revenio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revenio Group has no effect on the direction of Bittium Oyj i.e., Bittium Oyj and Revenio go up and down completely randomly.
Pair Corralation between Bittium Oyj and Revenio
Assuming the 90 days trading horizon Bittium Oyj is expected to generate 0.95 times more return on investment than Revenio. However, Bittium Oyj is 1.05 times less risky than Revenio. It trades about 0.17 of its potential returns per unit of risk. Revenio Group is currently generating about -0.27 per unit of risk. If you would invest 636.00 in Bittium Oyj on August 27, 2024 and sell it today you would earn a total of 58.00 from holding Bittium Oyj or generate 9.12% 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. Revenio Group
Performance |
| Timeline |
| Bittium Oyj |
| Revenio Group |
Bittium Oyj and Revenio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bittium Oyj and Revenio
The main advantage of trading using opposite Bittium Oyj and Revenio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bittium Oyj position performs unexpectedly, Revenio 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 Revenio will offset losses from the drop in Revenio'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 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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