Correlation Between Viafin Service and Purmo Group
Can any of the company-specific risk be diversified away by investing in both Viafin Service and Purmo 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 Viafin Service and Purmo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viafin Service Oyj and Purmo Group Oyj, you can compare the effects of market volatilities on Viafin Service and Purmo 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 Viafin Service with a short position of Purmo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viafin Service and Purmo Group.
Diversification Opportunities for Viafin Service and Purmo Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viafin and Purmo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj and Purmo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purmo Group Oyj and Viafin Service 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 Viafin Service Oyj are associated (or correlated) with Purmo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purmo Group Oyj has no effect on the direction of Viafin Service i.e., Viafin Service and Purmo Group go up and down completely randomly.
Pair Corralation between Viafin Service and Purmo Group
Assuming the 90 days trading horizon Viafin Service Oyj is expected to generate 2.39 times more return on investment than Purmo Group. However, Viafin Service is 2.39 times more volatile than Purmo Group Oyj. It trades about 0.16 of its potential returns per unit of risk. Purmo Group Oyj is currently generating about 0.03 per unit of risk. If you would invest 1,820 in Viafin Service Oyj on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Viafin Service Oyj or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viafin Service Oyj vs. Purmo Group Oyj
Performance |
| Timeline |
| Viafin Service Oyj |
| Purmo Group Oyj |
Viafin Service and Purmo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viafin Service and Purmo Group
The main advantage of trading using opposite Viafin Service and Purmo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viafin Service position performs unexpectedly, Purmo 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 Purmo Group will offset losses from the drop in Purmo Group's long position.| Viafin Service vs. SSH Communications Security | Viafin Service vs. Nordea Bank Abp | Viafin Service vs. Alandsbanken Abp A | Viafin Service vs. Nightingale Health Oyj |
| Purmo Group vs. Vaisala Oyj A | Purmo Group vs. Sanoma Oyj | Purmo Group vs. EcoUp Oyj | Purmo Group vs. KONE 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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