Correlation Between Tokmanni Group and Etteplan Oyj
Can any of the company-specific risk be diversified away by investing in both Tokmanni Group and Etteplan 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 Tokmanni Group and Etteplan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokmanni Group Oyj and Etteplan Oyj, you can compare the effects of market volatilities on Tokmanni Group and Etteplan 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 Tokmanni Group with a short position of Etteplan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokmanni Group and Etteplan Oyj.
Diversification Opportunities for Tokmanni Group and Etteplan Oyj
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tokmanni and Etteplan is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tokmanni Group Oyj and Etteplan Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etteplan Oyj and Tokmanni Group 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 Tokmanni Group Oyj are associated (or correlated) with Etteplan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etteplan Oyj has no effect on the direction of Tokmanni Group i.e., Tokmanni Group and Etteplan Oyj go up and down completely randomly.
Pair Corralation between Tokmanni Group and Etteplan Oyj
Assuming the 90 days trading horizon Tokmanni Group Oyj is expected to generate 2.26 times more return on investment than Etteplan Oyj. However, Tokmanni Group is 2.26 times more volatile than Etteplan Oyj. It trades about 0.18 of its potential returns per unit of risk. Etteplan Oyj is currently generating about -0.13 per unit of risk. If you would invest 1,044 in Tokmanni Group Oyj on August 30, 2024 and sell it today you would earn a total of 148.00 from holding Tokmanni Group Oyj or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tokmanni Group Oyj vs. Etteplan Oyj
Performance |
| Timeline |
| Tokmanni Group Oyj |
| Etteplan Oyj |
Tokmanni Group and Etteplan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokmanni Group and Etteplan Oyj
The main advantage of trading using opposite Tokmanni Group and Etteplan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokmanni Group position performs unexpectedly, Etteplan 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 Etteplan Oyj will offset losses from the drop in Etteplan Oyj's long position.| Tokmanni Group vs. Harvia Oyj | Tokmanni Group vs. Kamux Suomi Oy | Tokmanni Group vs. Qt Group Oyj | Tokmanni Group vs. Revenio Group |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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