Correlation Between Kemira Oyj and Revenio
Can any of the company-specific risk be diversified away by investing in both Kemira 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 Kemira Oyj and Revenio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemira Oyj and Revenio Group, you can compare the effects of market volatilities on Kemira 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 Kemira Oyj with a short position of Revenio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemira Oyj and Revenio.
Diversification Opportunities for Kemira Oyj and Revenio
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kemira and Revenio is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kemira Oyj and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group 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 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 Kemira Oyj i.e., Kemira Oyj and Revenio go up and down completely randomly.
Pair Corralation between Kemira Oyj and Revenio
Assuming the 90 days trading horizon Kemira Oyj is expected to generate 0.8 times more return on investment than Revenio. However, Kemira Oyj is 1.25 times less risky than Revenio. It trades about 0.08 of its potential returns per unit of risk. Revenio Group is currently generating about 0.04 per unit of risk. If you would invest 1,314 in Kemira Oyj on September 12, 2024 and sell it today you would earn a total of 635.00 from holding Kemira Oyj or generate 48.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemira Oyj vs. Revenio Group
Performance |
| Timeline |
| Kemira Oyj |
| Revenio Group |
Kemira Oyj and Revenio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemira Oyj and Revenio
The main advantage of trading using opposite Kemira Oyj and Revenio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemira 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.| Kemira Oyj vs. UPM Kymmene Oyj | Kemira Oyj vs. Stora Enso Oyj | Kemira Oyj vs. Valmet Oyj | Kemira Oyj vs. Wartsila Oyj Abp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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