Correlation Between Sitowise Group and Tokmanni Group
Can any of the company-specific risk be diversified away by investing in both Sitowise Group 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 Sitowise Group and Tokmanni Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitowise Group Oyj and Tokmanni Group Oyj, you can compare the effects of market volatilities on Sitowise Group 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 Sitowise Group with a short position of Tokmanni Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitowise Group and Tokmanni Group.
Diversification Opportunities for Sitowise Group and Tokmanni Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sitowise and Tokmanni is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sitowise Group Oyj 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 Sitowise Group 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 Sitowise Group Oyj 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 Sitowise Group i.e., Sitowise Group and Tokmanni Group go up and down completely randomly.
Pair Corralation between Sitowise Group and Tokmanni Group
Assuming the 90 days trading horizon Sitowise Group Oyj is expected to generate 1.23 times more return on investment than Tokmanni Group. However, Sitowise Group is 1.23 times more volatile than Tokmanni Group Oyj. It trades about 0.0 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 296.00 in Sitowise Group Oyj on September 3, 2024 and sell it today you would lose (20.00) from holding Sitowise Group Oyj or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitowise Group Oyj vs. Tokmanni Group Oyj
Performance |
| Timeline |
| Sitowise Group Oyj |
| Tokmanni Group Oyj |
Sitowise Group and Tokmanni Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitowise Group and Tokmanni Group
The main advantage of trading using opposite Sitowise Group and Tokmanni Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitowise Group 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.| Sitowise Group vs. TietoEVRY Corp | Sitowise Group vs. Tokmanni Group Oyj | Sitowise Group vs. Harvia Oyj | Sitowise Group vs. Puuilo 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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