Correlation Between Lassila Tikanoja and Oriola KD
Can any of the company-specific risk be diversified away by investing in both Lassila Tikanoja and Oriola KD 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 Lassila Tikanoja and Oriola KD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lassila Tikanoja Oyj and Oriola KD Oyj A, you can compare the effects of market volatilities on Lassila Tikanoja and Oriola KD 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 Lassila Tikanoja with a short position of Oriola KD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassila Tikanoja and Oriola KD.
Diversification Opportunities for Lassila Tikanoja and Oriola KD
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lassila and Oriola is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lassila Tikanoja Oyj and Oriola KD Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola KD Oyj and Lassila Tikanoja 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 Lassila Tikanoja Oyj are associated (or correlated) with Oriola KD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola KD Oyj has no effect on the direction of Lassila Tikanoja i.e., Lassila Tikanoja and Oriola KD go up and down completely randomly.
Pair Corralation between Lassila Tikanoja and Oriola KD
Assuming the 90 days trading horizon Lassila Tikanoja Oyj is expected to generate 0.52 times more return on investment than Oriola KD. However, Lassila Tikanoja Oyj is 1.93 times less risky than Oriola KD. It trades about -0.42 of its potential returns per unit of risk. Oriola KD Oyj A is currently generating about -0.25 per unit of risk. If you would invest 875.00 in Lassila Tikanoja Oyj on August 30, 2024 and sell it today you would lose (48.00) from holding Lassila Tikanoja Oyj or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lassila Tikanoja Oyj vs. Oriola KD Oyj A
Performance |
| Timeline |
| Lassila Tikanoja Oyj |
| Oriola KD Oyj |
Lassila Tikanoja and Oriola KD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lassila Tikanoja and Oriola KD
The main advantage of trading using opposite Lassila Tikanoja and Oriola KD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lassila Tikanoja position performs unexpectedly, Oriola KD 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 Oriola KD will offset losses from the drop in Oriola KD's long position.| Lassila Tikanoja vs. Telefonaktiebolaget LM Ericsson | Lassila Tikanoja vs. SSAB AB ser | Lassila Tikanoja vs. SSAB AB ser | Lassila Tikanoja vs. Telia Company AB |
| Oriola KD vs. Oriola KD Oyj B | Oriola KD vs. Lassila Tikanoja Oyj | Oriola KD vs. Raisio Oyj Vaihto osake | Oriola KD vs. YIT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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