Correlation Between Tecnotree Oyj and Incap Oyj
Can any of the company-specific risk be diversified away by investing in both Tecnotree Oyj and Incap 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 Incap 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 Incap Oyj, you can compare the effects of market volatilities on Tecnotree Oyj and Incap 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 Incap Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecnotree Oyj and Incap Oyj.
Diversification Opportunities for Tecnotree Oyj and Incap Oyj
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tecnotree and Incap is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tecnotree Oyj and Incap Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incap Oyj 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 Incap Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incap Oyj has no effect on the direction of Tecnotree Oyj i.e., Tecnotree Oyj and Incap Oyj go up and down completely randomly.
Pair Corralation between Tecnotree Oyj and Incap Oyj
Assuming the 90 days trading horizon Tecnotree Oyj is expected to under-perform the Incap Oyj. In addition to that, Tecnotree Oyj is 1.26 times more volatile than Incap Oyj. It trades about -0.35 of its total potential returns per unit of risk. Incap Oyj is currently generating about -0.1 per unit of volatility. If you would invest 1,050 in Incap Oyj on August 24, 2024 and sell it today you would lose (47.00) from holding Incap Oyj or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tecnotree Oyj vs. Incap Oyj
Performance |
| Timeline |
| Tecnotree Oyj |
| Incap Oyj |
Tecnotree Oyj and Incap Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tecnotree Oyj and Incap Oyj
The main advantage of trading using opposite Tecnotree Oyj and Incap Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tecnotree Oyj position performs unexpectedly, Incap 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 Incap Oyj will offset losses from the drop in Incap Oyj's long position.| Tecnotree Oyj vs. Qt Group Oyj | Tecnotree Oyj vs. Bittium Oyj | Tecnotree Oyj vs. Harvia Oyj | Tecnotree Oyj vs. Kamux Suomi Oy |
| Incap Oyj vs. Harvia Oyj | Incap Oyj vs. Qt Group Oyj | Incap Oyj vs. Revenio Group | Incap Oyj vs. Tecnotree 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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