Correlation Between CapMan Oyj and Reka Industrial
Can any of the company-specific risk be diversified away by investing in both CapMan Oyj and Reka Industrial 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 CapMan Oyj and Reka Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapMan Oyj B and Reka Industrial Oyj, you can compare the effects of market volatilities on CapMan Oyj and Reka Industrial 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 CapMan Oyj with a short position of Reka Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapMan Oyj and Reka Industrial.
Diversification Opportunities for CapMan Oyj and Reka Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CapMan and Reka is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CapMan Oyj B and Reka Industrial Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reka Industrial Oyj and CapMan 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 CapMan Oyj B are associated (or correlated) with Reka Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reka Industrial Oyj has no effect on the direction of CapMan Oyj i.e., CapMan Oyj and Reka Industrial go up and down completely randomly.
Pair Corralation between CapMan Oyj and Reka Industrial
Assuming the 90 days trading horizon CapMan Oyj B is expected to generate 0.77 times more return on investment than Reka Industrial. However, CapMan Oyj B is 1.3 times less risky than Reka Industrial. It trades about -0.04 of its potential returns per unit of risk. Reka Industrial Oyj is currently generating about -0.03 per unit of risk. If you would invest 191.00 in CapMan Oyj B on September 1, 2024 and sell it today you would lose (14.00) from holding CapMan Oyj B or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapMan Oyj B vs. Reka Industrial Oyj
Performance |
| Timeline |
| CapMan Oyj B |
| Reka Industrial Oyj |
CapMan Oyj and Reka Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapMan Oyj and Reka Industrial
The main advantage of trading using opposite CapMan Oyj and Reka Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapMan Oyj position performs unexpectedly, Reka Industrial 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 Reka Industrial will offset losses from the drop in Reka Industrial's long position.| CapMan Oyj vs. Nightingale Health Oyj | CapMan Oyj vs. Alandsbanken Abp A | CapMan Oyj vs. Detection Technology OY | CapMan Oyj vs. Nordea Bank Abp |
| Reka Industrial vs. Oma Saastopankki Oyj | Reka Industrial vs. Optomed PLC | Reka Industrial vs. Tecnotree Oyj | Reka Industrial vs. Tokmanni 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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