Correlation Between Terveystalo and Tokmanni Group
Can any of the company-specific risk be diversified away by investing in both Terveystalo and Tokmanni 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 Terveystalo and Tokmanni Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terveystalo Oy and Tokmanni Group Oyj, you can compare the effects of market volatilities on Terveystalo and Tokmanni 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 Terveystalo with a short position of Tokmanni Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terveystalo and Tokmanni Group.
Diversification Opportunities for Terveystalo and Tokmanni Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Terveystalo and Tokmanni is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Terveystalo Oy and Tokmanni Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokmanni Group Oyj and Terveystalo 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 Terveystalo Oy are associated (or correlated) with Tokmanni Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokmanni Group Oyj has no effect on the direction of Terveystalo i.e., Terveystalo and Tokmanni Group go up and down completely randomly.
Pair Corralation between Terveystalo and Tokmanni Group
Assuming the 90 days trading horizon Terveystalo is expected to generate 2.4 times less return on investment than Tokmanni Group. But when comparing it to its historical volatility, Terveystalo Oy is 2.05 times less risky than Tokmanni Group. It trades about 0.35 of its potential returns per unit of risk. Tokmanni Group Oyj is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Tokmanni Group Oyj on September 13, 2024 and sell it today you would earn a total of 316.00 from holding Tokmanni Group Oyj or generate 32.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terveystalo Oy vs. Tokmanni Group Oyj
Performance |
| Timeline |
| Terveystalo Oy |
| Tokmanni Group Oyj |
Terveystalo and Tokmanni Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terveystalo and Tokmanni Group
The main advantage of trading using opposite Terveystalo and Tokmanni Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terveystalo position performs unexpectedly, Tokmanni 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 Tokmanni Group will offset losses from the drop in Tokmanni Group's long position.| Terveystalo vs. Sampo Oyj A | Terveystalo vs. UPM Kymmene Oyj | Terveystalo vs. Wartsila Oyj Abp | Terveystalo vs. Elisa Oyj |
| Tokmanni Group vs. Sampo Oyj A | Tokmanni Group vs. Harvia Oyj | Tokmanni Group vs. Nordea Bank Abp | Tokmanni Group vs. Fortum 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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