Correlation Between Raisio Oyj and Tokmanni Group
Can any of the company-specific risk be diversified away by investing in both Raisio Oyj and Tokmanni 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 Raisio Oyj and Tokmanni Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raisio Oyj Vaihto osake and Tokmanni Group Oyj, you can compare the effects of market volatilities on Raisio Oyj and Tokmanni 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 Raisio Oyj with a short position of Tokmanni Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raisio Oyj and Tokmanni Group.
Diversification Opportunities for Raisio Oyj and Tokmanni Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Raisio and Tokmanni is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Raisio Oyj Vaihto osake and Tokmanni Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokmanni Group Oyj and Raisio 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 Raisio Oyj Vaihto osake are associated (or correlated) with Tokmanni Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokmanni Group Oyj has no effect on the direction of Raisio Oyj i.e., Raisio Oyj and Tokmanni Group go up and down completely randomly.
Pair Corralation between Raisio Oyj and Tokmanni Group
Assuming the 90 days trading horizon Raisio Oyj is expected to generate 1.03 times less return on investment than Tokmanni Group. But when comparing it to its historical volatility, Raisio Oyj Vaihto osake is 1.38 times less risky than Tokmanni Group. It trades about 0.04 of its potential returns per unit of risk. Tokmanni Group Oyj is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,127 in Tokmanni Group Oyj on September 14, 2024 and sell it today you would earn a total of 153.00 from holding Tokmanni Group Oyj or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raisio Oyj Vaihto osake vs. Tokmanni Group Oyj
Performance |
| Timeline |
| Raisio Oyj Vaihto |
| Tokmanni Group Oyj |
Raisio Oyj and Tokmanni Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raisio Oyj and Tokmanni Group
The main advantage of trading using opposite Raisio Oyj and Tokmanni Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raisio Oyj position performs unexpectedly, Tokmanni 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 Tokmanni Group will offset losses from the drop in Tokmanni Group's long position.| Raisio Oyj vs. Tokmanni Group Oyj | Raisio Oyj vs. Kemira Oyj | Raisio Oyj vs. Telia Company AB | Raisio Oyj vs. Outokumpu Oyj |
| Tokmanni Group vs. Sampo Oyj A | Tokmanni Group vs. Harvia Oyj | Tokmanni Group vs. Nordea Bank Abp | Tokmanni Group vs. Fortum 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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