Correlation Between Orion Oyj and Innofactor Oyj
Can any of the company-specific risk be diversified away by investing in both Orion Oyj and Innofactor 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 Orion Oyj and Innofactor Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orion Oyj B and Innofactor Oyj, you can compare the effects of market volatilities on Orion Oyj and Innofactor 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 Orion Oyj with a short position of Innofactor Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Oyj and Innofactor Oyj.
Diversification Opportunities for Orion Oyj and Innofactor Oyj
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orion and Innofactor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Orion Oyj B and Innofactor Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innofactor Oyj and Orion 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 Orion Oyj B are associated (or correlated) with Innofactor Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innofactor Oyj has no effect on the direction of Orion Oyj i.e., Orion Oyj and Innofactor Oyj go up and down completely randomly.
Pair Corralation between Orion Oyj and Innofactor Oyj
Assuming the 90 days trading horizon Orion Oyj is expected to generate 45.55 times less return on investment than Innofactor Oyj. But when comparing it to its historical volatility, Orion Oyj B is 1.68 times less risky than Innofactor Oyj. It trades about 0.0 of its potential returns per unit of risk. Innofactor Oyj is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Innofactor Oyj on August 24, 2024 and sell it today you would earn a total of 77.00 from holding Innofactor Oyj or generate 82.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Oyj B vs. Innofactor Oyj
Performance |
| Timeline |
| Orion Oyj B |
| Innofactor Oyj |
Orion Oyj and Innofactor Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Oyj and Innofactor Oyj
The main advantage of trading using opposite Orion Oyj and Innofactor Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion Oyj position performs unexpectedly, Innofactor 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 Innofactor Oyj will offset losses from the drop in Innofactor Oyj's long position.| Orion Oyj vs. Sampo Oyj A | Orion Oyj vs. UPM Kymmene Oyj | Orion Oyj vs. Wartsila Oyj Abp | Orion Oyj vs. Elisa Oyj |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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