Correlation Between Aspocomp Group and Bittium Oyj

Can any of the company-specific risk be diversified away by investing in both Aspocomp Group and Bittium 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 Aspocomp Group and Bittium Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspocomp Group Oyj and Bittium Oyj, you can compare the effects of market volatilities on Aspocomp Group and Bittium 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 Aspocomp Group with a short position of Bittium Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspocomp Group and Bittium Oyj.

Diversification Opportunities for Aspocomp Group and Bittium Oyj

0.02

Correlation Coefficient

Aspocomp Group  Bittium Oyj

Significant diversification

The 3 months correlation between Aspocomp and Bittium is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aspocomp Group Oyj and Bittium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bittium Oyj and Aspocomp Group 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 Aspocomp Group Oyj are associated (or correlated) with Bittium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bittium Oyj has no effect on the direction of Aspocomp Group i.e., Aspocomp Group and Bittium Oyj go up and down completely randomly.

Pair Corralation between Aspocomp Group and Bittium Oyj

Assuming the 90 days trading horizon Aspocomp Group Oyj is expected to under-perform the Bittium Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Aspocomp Group Oyj is 1.05 times less risky than Bittium Oyj. The stock trades about -0.06 of its potential returns per unit of risk. The Bittium Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  417.00  in Bittium Oyj on October 10, 2024 and sell it today you would earn a total of  249.00  from holding Bittium Oyj or generate 59.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aspocomp Group Oyj  vs.  Bittium Oyj

Aspocomp Group Oyj

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aspocomp Group Oyj are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Aspocomp Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bittium Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bittium Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Bittium Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aspocomp Group and Bittium Oyj

The main advantage of trading using opposite Aspocomp Group and Bittium Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspocomp Group position performs unexpectedly, Bittium 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 Bittium Oyj will offset losses from the drop in Bittium Oyj's long position.

The idea behind Aspocomp Group Oyj and Bittium 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.