Correlation Between Aspo Oyj and Titanium Oyj

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

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

Diversification Opportunities for Aspo Oyj and Titanium Oyj

0.19

Correlation Coefficient

Aspo Oyj  Titanium Oyj

Average diversification

The 3 months correlation between Aspo and Titanium is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aspo Oyj and Titanium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium Oyj and Aspo Oyj 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 Aspo Oyj are associated (or correlated) with Titanium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Oyj has no effect on the direction of Aspo Oyj i.e., Aspo Oyj and Titanium Oyj go up and down completely randomly.

Pair Corralation between Aspo Oyj and Titanium Oyj

Assuming the 90 days trading horizon Aspo Oyj is expected to under-perform the Titanium Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Aspo Oyj is 1.76 times less risky than Titanium Oyj. The stock trades about -0.25 of its potential returns per unit of risk. The Titanium Oyj is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,010  in Titanium Oyj on September 13, 2024 and sell it today you would earn a total of  80.00  from holding Titanium Oyj or generate 7.92% return on investment over 90 days.

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

Aspo Oyj  vs.  Titanium Oyj

Aspo Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspo Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Titanium Oyj

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Titanium Oyj are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Titanium Oyj may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aspo Oyj and Titanium Oyj

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

The idea behind Aspo Oyj and Titanium 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.