Correlation Between Sotkamo Silver and Remedy Entertainment
Can any of the company-specific risk be diversified away by investing in both Sotkamo Silver and Remedy Entertainment 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 Sotkamo Silver and Remedy Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotkamo Silver AB and Remedy Entertainment Oyj, you can compare the effects of market volatilities on Sotkamo Silver and Remedy Entertainment 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 Sotkamo Silver with a short position of Remedy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotkamo Silver and Remedy Entertainment.
Diversification Opportunities for Sotkamo Silver and Remedy Entertainment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sotkamo and Remedy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sotkamo Silver AB and Remedy Entertainment Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remedy Entertainment Oyj and Sotkamo Silver 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 Sotkamo Silver AB are associated (or correlated) with Remedy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remedy Entertainment Oyj has no effect on the direction of Sotkamo Silver i.e., Sotkamo Silver and Remedy Entertainment go up and down completely randomly.
Pair Corralation between Sotkamo Silver and Remedy Entertainment
Assuming the 90 days trading horizon Sotkamo Silver is expected to generate 1.02 times less return on investment than Remedy Entertainment. But when comparing it to its historical volatility, Sotkamo Silver AB is 1.2 times less risky than Remedy Entertainment. It trades about 0.06 of its potential returns per unit of risk. Remedy Entertainment Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,376 in Remedy Entertainment Oyj on November 28, 2024 and sell it today you would earn a total of 28.00 from holding Remedy Entertainment Oyj or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sotkamo Silver AB vs. Remedy Entertainment Oyj
Performance |
| Timeline |
| Sotkamo Silver AB |
| Remedy Entertainment Oyj |
Sotkamo Silver and Remedy Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotkamo Silver and Remedy Entertainment
The main advantage of trading using opposite Sotkamo Silver and Remedy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotkamo Silver position performs unexpectedly, Remedy Entertainment 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 Remedy Entertainment will offset losses from the drop in Remedy Entertainment's long position.| Sotkamo Silver vs. Outokumpu Oyj | Sotkamo Silver vs. Finnair Oyj | Sotkamo Silver vs. SSAB AB ser | Sotkamo Silver vs. Telia Company AB |
| Remedy Entertainment vs. Harvia Oyj | Remedy Entertainment vs. Qt Group Oyj | Remedy Entertainment vs. Kamux Suomi Oy | Remedy Entertainment vs. Revenio Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |