Correlation Between KONE Oyj and Aktia Bank
Can any of the company-specific risk be diversified away by investing in both KONE Oyj and Aktia Bank 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 KONE Oyj and Aktia Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Aktia Bank Abp, you can compare the effects of market volatilities on KONE Oyj and Aktia Bank 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 KONE Oyj with a short position of Aktia Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Aktia Bank.
Diversification Opportunities for KONE Oyj and Aktia Bank
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KONE and Aktia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Aktia Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aktia Bank Abp and KONE 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 KONE Oyj are associated (or correlated) with Aktia Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aktia Bank Abp has no effect on the direction of KONE Oyj i.e., KONE Oyj and Aktia Bank go up and down completely randomly.
Pair Corralation between KONE Oyj and Aktia Bank
Assuming the 90 days trading horizon KONE Oyj is expected to under-perform the Aktia Bank. In addition to that, KONE Oyj is 3.01 times more volatile than Aktia Bank Abp. It trades about -0.25 of its total potential returns per unit of risk. Aktia Bank Abp is currently generating about -0.09 per unit of volatility. If you would invest 928.00 in Aktia Bank Abp on August 30, 2024 and sell it today you would lose (8.00) from holding Aktia Bank Abp or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Aktia Bank Abp
Performance |
| Timeline |
| KONE Oyj |
| Aktia Bank Abp |
KONE Oyj and Aktia Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Aktia Bank
The main advantage of trading using opposite KONE Oyj and Aktia Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj position performs unexpectedly, Aktia Bank 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 Aktia Bank will offset losses from the drop in Aktia Bank's long position.| KONE Oyj vs. Sampo Oyj A | KONE Oyj vs. Fortum Oyj | KONE Oyj vs. UPM Kymmene Oyj | KONE Oyj vs. Neste Oil Oyj |
| Aktia Bank vs. Alandsbanken Abp B | Aktia Bank vs. CapMan Oyj B | Aktia Bank vs. Tokmanni Group Oyj | Aktia Bank vs. Oma Saastopankki 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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