Correlation Between Revenio and CapMan Oyj
Can any of the company-specific risk be diversified away by investing in both Revenio and CapMan 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 Revenio and CapMan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revenio Group and CapMan Oyj B, you can compare the effects of market volatilities on Revenio and CapMan 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 Revenio with a short position of CapMan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revenio and CapMan Oyj.
Diversification Opportunities for Revenio and CapMan Oyj
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Revenio and CapMan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Revenio Group and CapMan Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapMan Oyj B and Revenio 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 Revenio Group are associated (or correlated) with CapMan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapMan Oyj B has no effect on the direction of Revenio i.e., Revenio and CapMan Oyj go up and down completely randomly.
Pair Corralation between Revenio and CapMan Oyj
Assuming the 90 days trading horizon Revenio Group is expected to under-perform the CapMan Oyj. In addition to that, Revenio is 1.72 times more volatile than CapMan Oyj B. It trades about -0.15 of its total potential returns per unit of risk. CapMan Oyj B is currently generating about -0.1 per unit of volatility. If you would invest 183.00 in CapMan Oyj B on September 2, 2024 and sell it today you would lose (6.00) from holding CapMan Oyj B or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revenio Group vs. CapMan Oyj B
Performance |
| Timeline |
| Revenio Group |
| CapMan Oyj B |
Revenio and CapMan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revenio and CapMan Oyj
The main advantage of trading using opposite Revenio and CapMan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revenio position performs unexpectedly, CapMan 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 CapMan Oyj will offset losses from the drop in CapMan Oyj's long position.The idea behind Revenio Group and CapMan Oyj B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CapMan Oyj vs. Nordea Bank Abp | CapMan Oyj vs. Telia Company AB | CapMan Oyj vs. Fortum Oyj | CapMan Oyj vs. SSAB AB ser |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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