Correlation Between Alandsbanken Abp and Oma Saastopankki

Can any of the company-specific risk be diversified away by investing in both Alandsbanken Abp and Oma Saastopankki 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 Alandsbanken Abp and Oma Saastopankki into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alandsbanken Abp and Oma Saastopankki

-0.21

Correlation Coefficient

Alandsbanken Abp  Oma Saastopankki

Very good diversification

The 3 months correlation between Alandsbanken and Oma is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alandsbanken Abp A and Oma Saastopankki Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oma Saastopankki Oyj and Alandsbanken Abp 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 Alandsbanken Abp A are associated (or correlated) with Oma Saastopankki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oma Saastopankki Oyj has no effect on the direction of Alandsbanken Abp i.e., Alandsbanken Abp and Oma Saastopankki go up and down completely randomly.

Pair Corralation between Alandsbanken Abp and Oma Saastopankki

Assuming the 90 days trading horizon Alandsbanken Abp A is expected to generate 0.56 times more return on investment than Oma Saastopankki. However, Alandsbanken Abp A is 1.79 times less risky than Oma Saastopankki. It trades about 0.18 of its potential returns per unit of risk. Oma Saastopankki Oyj is currently generating about -0.11 per unit of risk. If you would invest  3,500  in Alandsbanken Abp A on December 1, 2024 and sell it today you would earn a total of  490.00  from holding Alandsbanken Abp A or generate 14.0% return on investment over 90 days.

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

Alandsbanken Abp A  vs.  Oma Saastopankki Oyj

Alandsbanken Abp A

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alandsbanken Abp A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Alandsbanken Abp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Oma Saastopankki Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oma Saastopankki Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Alandsbanken Abp and Oma Saastopankki

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

The idea behind Alandsbanken Abp A and Oma Saastopankki 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.