Correlation Between Sotkamo Silver and Toivo Group
Can any of the company-specific risk be diversified away by investing in both Sotkamo Silver and Toivo 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 Sotkamo Silver and Toivo Group 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 Toivo Group Oyj, you can compare the effects of market volatilities on Sotkamo Silver and Toivo 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 Sotkamo Silver with a short position of Toivo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotkamo Silver and Toivo Group.
Diversification Opportunities for Sotkamo Silver and Toivo Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sotkamo and Toivo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sotkamo Silver AB and Toivo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toivo Group 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 Toivo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toivo Group Oyj has no effect on the direction of Sotkamo Silver i.e., Sotkamo Silver and Toivo Group go up and down completely randomly.
Pair Corralation between Sotkamo Silver and Toivo Group
Assuming the 90 days trading horizon Sotkamo Silver AB is expected to generate 2.03 times more return on investment than Toivo Group. However, Sotkamo Silver is 2.03 times more volatile than Toivo Group Oyj. It trades about 0.12 of its potential returns per unit of risk. Toivo Group Oyj is currently generating about -0.27 per unit of risk. If you would invest 8.99 in Sotkamo Silver AB on November 3, 2024 and sell it today you would earn a total of 0.87 from holding Sotkamo Silver AB or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sotkamo Silver AB vs. Toivo Group Oyj
Performance |
| Timeline |
| Sotkamo Silver AB |
| Toivo Group Oyj |
Sotkamo Silver and Toivo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotkamo Silver and Toivo Group
The main advantage of trading using opposite Sotkamo Silver and Toivo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotkamo Silver position performs unexpectedly, Toivo 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 Toivo Group will offset losses from the drop in Toivo Group'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 |
| Toivo Group vs. Detection Technology OY | Toivo Group vs. Alandsbanken Abp B | Toivo Group vs. United Bankers Oyj | Toivo Group vs. Aktia Bank Abp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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