Correlation Between TFS FINANCIAL and Altia Oyj
Can any of the company-specific risk be diversified away by investing in both TFS FINANCIAL and Altia 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 TFS FINANCIAL and Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFS FINANCIAL and Altia Oyj, you can compare the effects of market volatilities on TFS FINANCIAL and Altia 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 TFS FINANCIAL with a short position of Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFS FINANCIAL and Altia Oyj.
Diversification Opportunities for TFS FINANCIAL and Altia Oyj
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TFS and Altia is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding TFS FINANCIAL and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj and TFS FINANCIAL 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 TFS FINANCIAL are associated (or correlated) with Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of TFS FINANCIAL i.e., TFS FINANCIAL and Altia Oyj go up and down completely randomly.
Pair Corralation between TFS FINANCIAL and Altia Oyj
Assuming the 90 days trading horizon TFS FINANCIAL is expected to generate 0.78 times more return on investment than Altia Oyj. However, TFS FINANCIAL is 1.29 times less risky than Altia Oyj. It trades about 0.03 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.04 per unit of risk. If you would invest 1,113 in TFS FINANCIAL on September 12, 2024 and sell it today you would earn a total of 167.00 from holding TFS FINANCIAL or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFS FINANCIAL vs. Altia Oyj
Performance |
| Timeline |
| TFS FINANCIAL |
| Altia Oyj |
TFS FINANCIAL and Altia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFS FINANCIAL and Altia Oyj
The main advantage of trading using opposite TFS FINANCIAL and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFS FINANCIAL position performs unexpectedly, Altia 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.| TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc | TFS FINANCIAL vs. Apple Inc |
| Altia Oyj vs. ALIOR BANK | Altia Oyj vs. TFS FINANCIAL | Altia Oyj vs. CDN IMPERIAL BANK | Altia Oyj vs. ANTA SPORTS PRODUCT |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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