Correlation Between Tecnotree Oyj and CapMan Oyj
Can any of the company-specific risk be diversified away by investing in both Tecnotree Oyj and CapMan Oyj 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 Tecnotree Oyj and CapMan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tecnotree Oyj and CapMan Oyj B, you can compare the effects of market volatilities on Tecnotree Oyj and CapMan Oyj 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 Tecnotree Oyj with a short position of CapMan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecnotree Oyj and CapMan Oyj.
Diversification Opportunities for Tecnotree Oyj and CapMan Oyj
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tecnotree and CapMan is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tecnotree Oyj and CapMan Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapMan Oyj B and Tecnotree Oyj 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 Tecnotree Oyj are associated (or correlated) with CapMan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapMan Oyj B has no effect on the direction of Tecnotree Oyj i.e., Tecnotree Oyj and CapMan Oyj go up and down completely randomly.
Pair Corralation between Tecnotree Oyj and CapMan Oyj
Assuming the 90 days trading horizon Tecnotree Oyj is expected to under-perform the CapMan Oyj. In addition to that, Tecnotree Oyj is 1.66 times more volatile than CapMan Oyj B. It trades about -0.33 of its total potential returns per unit of risk. CapMan Oyj B is currently generating about -0.15 per unit of volatility. If you would invest 183.00 in CapMan Oyj B on August 27, 2024 and sell it today you would lose (7.00) from holding CapMan Oyj B or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tecnotree Oyj vs. CapMan Oyj B
Performance |
| Timeline |
| Tecnotree Oyj |
| CapMan Oyj B |
Tecnotree Oyj and CapMan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tecnotree Oyj and CapMan Oyj
The main advantage of trading using opposite Tecnotree Oyj and CapMan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecnotree Oyj position performs unexpectedly, CapMan Oyj 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 CapMan Oyj will offset losses from the drop in CapMan Oyj's long position.| Tecnotree Oyj vs. CapMan Oyj B | Tecnotree Oyj vs. HKFoods Oyj A | Tecnotree Oyj vs. KONE Oyj | Tecnotree Oyj vs. Exel Composites Oyj |
| CapMan Oyj vs. Nordea Bank Abp | CapMan Oyj vs. Fortum Oyj | CapMan Oyj vs. UPM Kymmene Oyj | CapMan Oyj vs. Neste Oil 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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