Correlation Between Trainers House and Sotkamo Silver
Can any of the company-specific risk be diversified away by investing in both Trainers House and Sotkamo Silver 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 Sotkamo Silver 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 Sotkamo Silver AB, you can compare the effects of market volatilities on Trainers House and Sotkamo Silver 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 Sotkamo Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainers House and Sotkamo Silver.
Diversification Opportunities for Trainers House and Sotkamo Silver
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trainers and Sotkamo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and Sotkamo Silver AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotkamo Silver AB 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 Sotkamo Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotkamo Silver AB has no effect on the direction of Trainers House i.e., Trainers House and Sotkamo Silver go up and down completely randomly.
Pair Corralation between Trainers House and Sotkamo Silver
Assuming the 90 days trading horizon Trainers House Oyj is expected to generate 0.66 times more return on investment than Sotkamo Silver. However, Trainers House Oyj is 1.52 times less risky than Sotkamo Silver. It trades about -0.08 of its potential returns per unit of risk. Sotkamo Silver AB is currently generating about -0.28 per unit of risk. If you would invest 231.00 in Trainers House Oyj on August 30, 2024 and sell it today you would lose (15.00) from holding Trainers House Oyj or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainers House Oyj vs. Sotkamo Silver AB
Performance |
| Timeline |
| Trainers House Oyj |
| Sotkamo Silver AB |
Trainers House and Sotkamo Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainers House and Sotkamo Silver
The main advantage of trading using opposite Trainers House and Sotkamo Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainers House position performs unexpectedly, Sotkamo Silver 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 Sotkamo Silver will offset losses from the drop in Sotkamo Silver's long position.| Trainers House vs. Telefonaktiebolaget LM Ericsson | Trainers House vs. SSAB AB ser | Trainers House vs. SSAB AB ser | Trainers House vs. Telia Company AB |
| Sotkamo Silver vs. Outokumpu Oyj | Sotkamo Silver vs. Finnair Oyj | Sotkamo Silver vs. SSAB AB ser | Sotkamo Silver vs. Telia Company AB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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