Correlation Between HUT 8 and Altia Oyj
Can any of the company-specific risk be diversified away by investing in both HUT 8 and Altia 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 HUT 8 and Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUT 8 P and Altia Oyj, you can compare the effects of market volatilities on HUT 8 and Altia 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 HUT 8 with a short position of Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUT 8 and Altia Oyj.
Diversification Opportunities for HUT 8 and Altia Oyj
Pay attention - limited upside
The 3 months correlation between HUT and Altia is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding HUT 8 P and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj and HUT 8 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 HUT 8 P are associated (or correlated) with Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of HUT 8 i.e., HUT 8 and Altia Oyj go up and down completely randomly.
Pair Corralation between HUT 8 and Altia Oyj
Assuming the 90 days horizon HUT 8 P is expected to generate 3.74 times more return on investment than Altia Oyj. However, HUT 8 is 3.74 times more volatile than Altia Oyj. It trades about 0.08 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.08 per unit of risk. If you would invest 1,047 in HUT 8 P on August 29, 2024 and sell it today you would earn a total of 1,333 from holding HUT 8 P or generate 127.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 49.6% |
| Values | Daily Returns |
HUT 8 P vs. Altia Oyj
Performance |
| Timeline |
| HUT 8 P |
| Altia Oyj |
HUT 8 and Altia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUT 8 and Altia Oyj
The main advantage of trading using opposite HUT 8 and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUT 8 position performs unexpectedly, Altia 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.The idea behind HUT 8 P and Altia Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Altia Oyj vs. LANSON BCC INH EO | Altia Oyj vs. VIRGIN WINES UK | Altia Oyj vs. Superior Plus Corp | Altia Oyj vs. NMI Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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