Correlation Between KONE Oyj and Aspo Oyj
Can any of the company-specific risk be diversified away by investing in both KONE Oyj and Aspo 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 KONE Oyj and Aspo Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Aspo Oyj, you can compare the effects of market volatilities on KONE Oyj and Aspo 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 KONE Oyj with a short position of Aspo Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Aspo Oyj.
Diversification Opportunities for KONE Oyj and Aspo Oyj
Weak diversification
The 3 months correlation between KONE and Aspo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Aspo Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspo Oyj 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 Aspo Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspo Oyj has no effect on the direction of KONE Oyj i.e., KONE Oyj and Aspo Oyj go up and down completely randomly.
Pair Corralation between KONE Oyj and Aspo Oyj
Assuming the 90 days trading horizon KONE Oyj is expected to generate 1.15 times more return on investment than Aspo Oyj. However, KONE Oyj is 1.15 times more volatile than Aspo Oyj. It trades about -0.17 of its potential returns per unit of risk. Aspo Oyj is currently generating about -0.59 per unit of risk. If you would invest 5,158 in KONE Oyj on August 27, 2024 and sell it today you would lose (252.00) from holding KONE Oyj or give up 4.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Aspo Oyj
Performance |
| Timeline |
| KONE Oyj |
| Aspo Oyj |
KONE Oyj and Aspo Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Aspo Oyj
The main advantage of trading using opposite KONE Oyj and Aspo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj position performs unexpectedly, Aspo 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 Aspo Oyj will offset losses from the drop in Aspo Oyj's long position.| KONE Oyj vs. Aktia Bank Abp | KONE Oyj vs. Alandsbanken Abp B | KONE Oyj vs. Alandsbanken Abp A | KONE Oyj vs. Sampo Oyj A |
| Aspo Oyj vs. Tokmanni Group Oyj | Aspo Oyj vs. Kemira Oyj | Aspo Oyj vs. TietoEVRY Corp | Aspo Oyj vs. CapMan Oyj B |
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.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |