Correlation Between Innofactor Oyj and KONE Oyj
Can any of the company-specific risk be diversified away by investing in both Innofactor Oyj and KONE 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 Innofactor Oyj and KONE Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innofactor Oyj and KONE Oyj, you can compare the effects of market volatilities on Innofactor Oyj and KONE 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 Innofactor Oyj with a short position of KONE Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innofactor Oyj and KONE Oyj.
Diversification Opportunities for Innofactor Oyj and KONE Oyj
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innofactor and KONE is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Innofactor Oyj and KONE Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KONE Oyj and Innofactor 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 Innofactor Oyj are associated (or correlated) with KONE Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KONE Oyj has no effect on the direction of Innofactor Oyj i.e., Innofactor Oyj and KONE Oyj go up and down completely randomly.
Pair Corralation between Innofactor Oyj and KONE Oyj
Assuming the 90 days trading horizon Innofactor Oyj is expected to generate 0.88 times more return on investment than KONE Oyj. However, Innofactor Oyj is 1.14 times less risky than KONE Oyj. It trades about 0.02 of its potential returns per unit of risk. KONE Oyj is currently generating about -0.2 per unit of risk. If you would invest 168.00 in Innofactor Oyj on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Innofactor Oyj or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innofactor Oyj vs. KONE Oyj
Performance |
| Timeline |
| Innofactor Oyj |
| KONE Oyj |
Innofactor Oyj and KONE Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innofactor Oyj and KONE Oyj
The main advantage of trading using opposite Innofactor Oyj and KONE Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innofactor Oyj position performs unexpectedly, KONE 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 KONE Oyj will offset losses from the drop in KONE Oyj's long position.| Innofactor Oyj vs. Tecnotree Oyj | Innofactor Oyj vs. Qt Group Oyj | Innofactor Oyj vs. Harvia Oyj | Innofactor Oyj vs. Kamux Suomi Oy |
| KONE Oyj vs. Sampo Oyj A | KONE Oyj vs. Fortum Oyj | KONE Oyj vs. UPM Kymmene Oyj | KONE Oyj vs. Neste Oil 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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