Correlation Between Consti Yhtiot and Admicom Oyj
Can any of the company-specific risk be diversified away by investing in both Consti Yhtiot and Admicom Oyj 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 Consti Yhtiot and Admicom Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consti Yhtiot Oy and Admicom Oyj, you can compare the effects of market volatilities on Consti Yhtiot and Admicom 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 Consti Yhtiot with a short position of Admicom Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consti Yhtiot and Admicom Oyj.
Diversification Opportunities for Consti Yhtiot and Admicom Oyj
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consti and Admicom is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Consti Yhtiot Oy and Admicom Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admicom Oyj and Consti Yhtiot 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 Consti Yhtiot Oy are associated (or correlated) with Admicom Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admicom Oyj has no effect on the direction of Consti Yhtiot i.e., Consti Yhtiot and Admicom Oyj go up and down completely randomly.
Pair Corralation between Consti Yhtiot and Admicom Oyj
Assuming the 90 days trading horizon Consti Yhtiot Oy is expected to under-perform the Admicom Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Consti Yhtiot Oy is 1.62 times less risky than Admicom Oyj. The stock trades about -0.28 of its potential returns per unit of risk. The Admicom Oyj is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,880 in Admicom Oyj on September 3, 2024 and sell it today you would lose (10.00) from holding Admicom Oyj or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consti Yhtiot Oy vs. Admicom Oyj
Performance |
| Timeline |
| Consti Yhtiot Oy |
| Admicom Oyj |
Consti Yhtiot and Admicom Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consti Yhtiot and Admicom Oyj
The main advantage of trading using opposite Consti Yhtiot and Admicom Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consti Yhtiot position performs unexpectedly, Admicom 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 Admicom Oyj will offset losses from the drop in Admicom Oyj's long position.| Consti Yhtiot vs. Tokmanni Group Oyj | Consti Yhtiot vs. Verkkokauppa Oyj | Consti Yhtiot vs. Innofactor Oyj | Consti Yhtiot vs. Aspocomp Group Oyj |
| Admicom Oyj vs. SSH Communications Security | Admicom Oyj vs. Remedy Entertainment Oyj | Admicom Oyj vs. Detection Technology OY | Admicom Oyj vs. Alma Media 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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