Correlation Between Tokmanni Group and Musti Group
Can any of the company-specific risk be diversified away by investing in both Tokmanni Group and Musti 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 Tokmanni Group and Musti Group 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 Musti Group Oyj, you can compare the effects of market volatilities on Tokmanni Group and Musti 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 Tokmanni Group with a short position of Musti Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokmanni Group and Musti Group.
Diversification Opportunities for Tokmanni Group and Musti Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tokmanni and Musti is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tokmanni Group Oyj and Musti Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Musti Group 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 Musti Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Musti Group Oyj has no effect on the direction of Tokmanni Group i.e., Tokmanni Group and Musti Group go up and down completely randomly.
Pair Corralation between Tokmanni Group and Musti Group
Assuming the 90 days trading horizon Tokmanni Group Oyj is expected to generate 0.95 times more return on investment than Musti Group. However, Tokmanni Group Oyj is 1.05 times less risky than Musti Group. It trades about 0.44 of its potential returns per unit of risk. Musti Group Oyj is currently generating about 0.05 per unit of risk. If you would invest 1,227 in Tokmanni Group Oyj on November 3, 2024 and sell it today you would earn a total of 170.00 from holding Tokmanni Group Oyj or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokmanni Group Oyj vs. Musti Group Oyj
Performance |
| Timeline |
| Tokmanni Group Oyj |
| Musti Group Oyj |
Tokmanni Group and Musti Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokmanni Group and Musti Group
The main advantage of trading using opposite Tokmanni Group and Musti Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokmanni Group position performs unexpectedly, Musti 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 Musti Group will offset losses from the drop in Musti Group's long position.| Tokmanni Group vs. Sampo Oyj A | Tokmanni Group vs. Harvia Oyj | Tokmanni Group vs. Nordea Bank Abp | Tokmanni Group vs. Fortum Oyj |
| Musti Group vs. Harvia Oyj | Musti Group vs. Tokmanni Group Oyj | Musti Group vs. Kamux Suomi Oy | Musti Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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