Correlation Between PunaMusta Media and Musti Group
Can any of the company-specific risk be diversified away by investing in both PunaMusta Media and Musti Group 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 PunaMusta Media and Musti Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PunaMusta Media Oyj and Musti Group Oyj, you can compare the effects of market volatilities on PunaMusta Media and Musti Group 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 PunaMusta Media with a short position of Musti Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PunaMusta Media and Musti Group.
Diversification Opportunities for PunaMusta Media and Musti Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PunaMusta and Musti is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PunaMusta Media Oyj and Musti Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Musti Group Oyj and PunaMusta Media 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 PunaMusta Media Oyj are associated (or correlated) with Musti Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Musti Group Oyj has no effect on the direction of PunaMusta Media i.e., PunaMusta Media and Musti Group go up and down completely randomly.
Pair Corralation between PunaMusta Media and Musti Group
Assuming the 90 days trading horizon PunaMusta Media Oyj is expected to under-perform the Musti Group. In addition to that, PunaMusta Media is 1.21 times more volatile than Musti Group Oyj. It trades about -0.32 of its total potential returns per unit of risk. Musti Group Oyj is currently generating about -0.19 per unit of volatility. If you would invest 2,305 in Musti Group Oyj on September 1, 2024 and sell it today you would lose (215.00) from holding Musti Group Oyj or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 21.74% |
| Values | Daily Returns |
PunaMusta Media Oyj vs. Musti Group Oyj
Performance |
| Timeline |
| PunaMusta Media Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Musti Group Oyj |
PunaMusta Media and Musti Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PunaMusta Media and Musti Group
The main advantage of trading using opposite PunaMusta Media and Musti Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PunaMusta Media position performs unexpectedly, Musti Group 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 Musti Group will offset losses from the drop in Musti Group's long position.| PunaMusta Media vs. Tokmanni Group Oyj | PunaMusta Media vs. Kemira Oyj | PunaMusta Media vs. Elisa Oyj | PunaMusta Media vs. Valmet Oyj |
| Musti Group vs. Harvia Oyj | Musti Group vs. Tokmanni Group Oyj | Musti Group vs. Kamux Suomi Oy | Musti Group vs. Revenio Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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