Correlation Between Huhtamaki Oyj and Revenio
Can any of the company-specific risk be diversified away by investing in both Huhtamaki 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 Huhtamaki Oyj and Revenio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huhtamaki Oyj and Revenio Group, you can compare the effects of market volatilities on Huhtamaki 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 Huhtamaki Oyj with a short position of Revenio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huhtamaki Oyj and Revenio.
Diversification Opportunities for Huhtamaki Oyj and Revenio
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huhtamaki and Revenio is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Huhtamaki Oyj and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group and Huhtamaki 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 Huhtamaki 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 Huhtamaki Oyj i.e., Huhtamaki Oyj and Revenio go up and down completely randomly.
Pair Corralation between Huhtamaki Oyj and Revenio
Assuming the 90 days trading horizon Huhtamaki Oyj is expected to generate 0.55 times more return on investment than Revenio. However, Huhtamaki Oyj is 1.81 times less risky than Revenio. It trades about 0.04 of its potential returns per unit of risk. Revenio Group is currently generating about 0.0 per unit of risk. If you would invest 2,894 in Huhtamaki Oyj on August 28, 2024 and sell it today you would earn a total of 496.00 from holding Huhtamaki Oyj or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Huhtamaki Oyj vs. Revenio Group
Performance |
| Timeline |
| Huhtamaki Oyj |
| Revenio Group |
Huhtamaki Oyj and Revenio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huhtamaki Oyj and Revenio
The main advantage of trading using opposite Huhtamaki Oyj and Revenio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huhtamaki 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.The idea behind Huhtamaki Oyj and Revenio Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Revenio vs. Telia Company AB | Revenio vs. Wartsila Oyj Abp | Revenio vs. Tokmanni Group Oyj | Revenio vs. YIT 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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