Correlation Between Revenio and Tokmanni Group
Can any of the company-specific risk be diversified away by investing in both Revenio 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 Revenio and Tokmanni Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revenio Group and Tokmanni Group Oyj, you can compare the effects of market volatilities on Revenio 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 Revenio with a short position of Tokmanni Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revenio and Tokmanni Group.
Diversification Opportunities for Revenio and Tokmanni Group
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Revenio and Tokmanni is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Revenio Group 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 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 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 Revenio i.e., Revenio and Tokmanni Group go up and down completely randomly.
Pair Corralation between Revenio and Tokmanni Group
Assuming the 90 days trading horizon Revenio Group is expected to generate 1.06 times more return on investment than Tokmanni Group. However, Revenio is 1.06 times more volatile than Tokmanni Group Oyj. It trades about 0.05 of its potential returns per unit of risk. Tokmanni Group Oyj is currently generating about 0.02 per unit of risk. If you would invest 2,537 in Revenio Group on November 3, 2024 and sell it today you would earn a total of 557.00 from holding Revenio Group or generate 21.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revenio Group vs. Tokmanni Group Oyj
Performance |
| Timeline |
| Revenio Group |
| Tokmanni Group Oyj |
Revenio and Tokmanni Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revenio and Tokmanni Group
The main advantage of trading using opposite Revenio and Tokmanni Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revenio 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.The idea behind Revenio Group and Tokmanni Group Oyj 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.| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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