Correlation Between Trainers House and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Trainers House and Fortum 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 Trainers House and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainers House Oyj and Fortum Oyj, you can compare the effects of market volatilities on Trainers House and Fortum 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 Trainers House with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainers House and Fortum Oyj.
Diversification Opportunities for Trainers House and Fortum Oyj
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trainers and Fortum is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Trainers House 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 Trainers House Oyj are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of Trainers House i.e., Trainers House and Fortum Oyj go up and down completely randomly.
Pair Corralation between Trainers House and Fortum Oyj
Assuming the 90 days trading horizon Trainers House Oyj is expected to generate 2.22 times more return on investment than Fortum Oyj. However, Trainers House is 2.22 times more volatile than Fortum Oyj. It trades about 0.08 of its potential returns per unit of risk. Fortum Oyj is currently generating about 0.0 per unit of risk. If you would invest 213.00 in Trainers House Oyj on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Trainers House Oyj or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainers House Oyj vs. Fortum Oyj
Performance |
| Timeline |
| Trainers House Oyj |
| Fortum Oyj |
Trainers House and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainers House and Fortum Oyj
The main advantage of trading using opposite Trainers House and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainers House position performs unexpectedly, Fortum 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| Trainers House vs. Nordea Bank Abp | Trainers House vs. Detection Technology OY | Trainers House vs. SSH Communications Security |
| Fortum Oyj vs. HKFoods Oyj A | Fortum Oyj vs. Nightingale Health Oyj | Fortum Oyj vs. Alandsbanken Abp B | Fortum Oyj vs. Finnair 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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