Correlation Between Atria Oyj and Raisio Oyj

Can any of the company-specific risk be diversified away by investing in both Atria Oyj and Raisio 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 Raisio 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 Raisio Oyj, you can compare the effects of market volatilities on Atria Oyj and Raisio 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 Raisio Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atria Oyj and Raisio Oyj.

Diversification Opportunities for Atria Oyj and Raisio Oyj

0.27

Correlation Coefficient

Atria Oyj  Raisio Oyj

Modest diversification

The 3 months correlation between Atria and Raisio is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Atria Oyj A and Raisio Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raisio 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 Raisio Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raisio Oyj has no effect on the direction of Atria Oyj i.e., Atria Oyj and Raisio Oyj go up and down completely randomly.

Pair Corralation between Atria Oyj and Raisio Oyj

Assuming the 90 days trading horizon Atria Oyj A is expected to generate 0.74 times more return on investment than Raisio Oyj. However, Atria Oyj A is 1.36 times less risky than Raisio Oyj. It trades about 0.04 of its potential returns per unit of risk. Raisio Oyj is currently generating about -0.03 per unit of risk. If you would invest  1,100  in Atria Oyj A on October 5, 2024 and sell it today you would earn a total of  10.00  from holding Atria Oyj A or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Atria Oyj A  vs.  Raisio Oyj

Atria Oyj A

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atria Oyj A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Atria Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Raisio Oyj

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raisio Oyj are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Raisio 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 Atria Oyj and Raisio Oyj

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

The idea behind Atria Oyj A and Raisio 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.