Correlation Between Solteq PLC and Tokmanni Group
Can any of the company-specific risk be diversified away by investing in both Solteq PLC 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 Solteq PLC and Tokmanni Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solteq PLC and Tokmanni Group Oyj, you can compare the effects of market volatilities on Solteq PLC 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 Solteq PLC with a short position of Tokmanni Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solteq PLC and Tokmanni Group.
Diversification Opportunities for Solteq PLC and Tokmanni Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solteq and Tokmanni is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Solteq PLC 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 Solteq PLC 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 Solteq PLC 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 Solteq PLC i.e., Solteq PLC and Tokmanni Group go up and down completely randomly.
Pair Corralation between Solteq PLC and Tokmanni Group
Assuming the 90 days trading horizon Solteq PLC is expected to under-perform the Tokmanni Group. In addition to that, Solteq PLC is 1.54 times more volatile than Tokmanni Group Oyj. It trades about -0.04 of its total potential returns per unit of risk. Tokmanni Group Oyj is currently generating about 0.01 per unit of volatility. If you would invest 1,137 in Tokmanni Group Oyj on August 27, 2024 and sell it today you would lose (7.00) from holding Tokmanni Group Oyj or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solteq PLC vs. Tokmanni Group Oyj
Performance |
| Timeline |
| Solteq PLC |
| Tokmanni Group Oyj |
Solteq PLC and Tokmanni Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solteq PLC and Tokmanni Group
The main advantage of trading using opposite Solteq PLC and Tokmanni Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solteq PLC 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.| Solteq PLC vs. CapMan Oyj B | Solteq PLC vs. HKFoods Oyj A | Solteq PLC vs. KONE Oyj | Solteq PLC vs. Exel Composites 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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