Correlation Between Innofactor Oyj and Verkkokauppa Oyj
Can any of the company-specific risk be diversified away by investing in both Innofactor Oyj and Verkkokauppa 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 Verkkokauppa 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 Verkkokauppa Oyj, you can compare the effects of market volatilities on Innofactor Oyj and Verkkokauppa 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 Verkkokauppa Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innofactor Oyj and Verkkokauppa Oyj.
Diversification Opportunities for Innofactor Oyj and Verkkokauppa Oyj
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innofactor and Verkkokauppa is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Innofactor Oyj and Verkkokauppa Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verkkokauppa 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 Verkkokauppa Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verkkokauppa Oyj has no effect on the direction of Innofactor Oyj i.e., Innofactor Oyj and Verkkokauppa Oyj go up and down completely randomly.
Pair Corralation between Innofactor Oyj and Verkkokauppa Oyj
Assuming the 90 days trading horizon Innofactor Oyj is expected to generate 3530.8 times less return on investment than Verkkokauppa Oyj. But when comparing it to its historical volatility, Innofactor Oyj is 12.96 times less risky than Verkkokauppa Oyj. It trades about 0.0 of its potential returns per unit of risk. Verkkokauppa Oyj is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Verkkokauppa Oyj on November 28, 2024 and sell it today you would earn a total of 61.00 from holding Verkkokauppa Oyj or generate 44.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innofactor Oyj vs. Verkkokauppa Oyj
Performance |
| Timeline |
| Innofactor Oyj |
| Verkkokauppa Oyj |
Innofactor Oyj and Verkkokauppa Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innofactor Oyj and Verkkokauppa Oyj
The main advantage of trading using opposite Innofactor Oyj and Verkkokauppa Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innofactor Oyj position performs unexpectedly, Verkkokauppa 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 Verkkokauppa Oyj will offset losses from the drop in Verkkokauppa Oyj's long position.| Innofactor Oyj vs. Tecnotree Oyj | Innofactor Oyj vs. Solteq PLC | Innofactor Oyj vs. TietoEVRY Corp | Innofactor Oyj vs. Tokmanni Group Oyj |
| Verkkokauppa Oyj vs. Tokmanni Group Oyj | Verkkokauppa Oyj vs. Harvia Oyj | Verkkokauppa Oyj vs. Sampo Oyj A | Verkkokauppa Oyj vs. Kamux Suomi Oy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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