Correlation Between Kemira Oyj and Alma Media
Can any of the company-specific risk be diversified away by investing in both Kemira Oyj and Alma Media 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 Kemira Oyj and Alma Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemira Oyj and Alma Media Oyj, you can compare the effects of market volatilities on Kemira Oyj and Alma Media 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 Kemira Oyj with a short position of Alma Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemira Oyj and Alma Media.
Diversification Opportunities for Kemira Oyj and Alma Media
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kemira and Alma is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kemira Oyj and Alma Media Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alma Media Oyj and Kemira 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 Kemira Oyj are associated (or correlated) with Alma Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alma Media Oyj has no effect on the direction of Kemira Oyj i.e., Kemira Oyj and Alma Media go up and down completely randomly.
Pair Corralation between Kemira Oyj and Alma Media
Assuming the 90 days trading horizon Kemira Oyj is expected to under-perform the Alma Media. But the stock apears to be less risky and, when comparing its historical volatility, Kemira Oyj is 1.29 times less risky than Alma Media. The stock trades about -0.31 of its potential returns per unit of risk. The Alma Media Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,110 in Alma Media Oyj on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Alma Media Oyj or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemira Oyj vs. Alma Media Oyj
Performance |
| Timeline |
| Kemira Oyj |
| Alma Media Oyj |
Kemira Oyj and Alma Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemira Oyj and Alma Media
The main advantage of trading using opposite Kemira Oyj and Alma Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemira Oyj position performs unexpectedly, Alma Media 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 Alma Media will offset losses from the drop in Alma Media's long position.The idea behind Kemira Oyj and Alma Media Oyj 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.| Alma Media vs. Tokmanni Group Oyj | Alma Media vs. Kemira Oyj | Alma Media vs. Valmet Oyj | Alma Media vs. Vaisala Oyj A |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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