Correlation Between Atria Oyj and Kemira Oyj

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

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

Diversification Opportunities for Atria Oyj and Kemira Oyj

0.34

Correlation Coefficient

Atria Oyj  Kemira Oyj

Weak diversification

The 3 months correlation between Atria and Kemira is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Atria Oyj A and Kemira Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kemira Oyj and Atria 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 Atria Oyj A are associated (or correlated) with Kemira Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kemira Oyj has no effect on the direction of Atria Oyj i.e., Atria Oyj and Kemira Oyj go up and down completely randomly.

Pair Corralation between Atria Oyj and Kemira Oyj

Assuming the 90 days trading horizon Atria Oyj A is expected to generate 1.86 times more return on investment than Kemira Oyj. However, Atria Oyj is 1.86 times more volatile than Kemira Oyj. It trades about 0.33 of its potential returns per unit of risk. Kemira Oyj is currently generating about 0.48 per unit of risk. If you would invest  1,070  in Atria Oyj A on October 23, 2024 and sell it today you would earn a total of  95.00  from holding Atria Oyj A or generate 8.88% return on investment over 90 days.

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

Atria Oyj A  vs.  Kemira Oyj

Atria Oyj A

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atria Oyj A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Atria Oyj may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kemira Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kemira Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Kemira Oyj is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atria Oyj and Kemira Oyj

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

The idea behind Atria Oyj A and Kemira 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.