Correlation Between CapMan Oyj and Aspocomp Group

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

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

Diversification Opportunities for CapMan Oyj and Aspocomp Group

-0.53

Correlation Coefficient

CapMan Oyj  Aspocomp Group

Excellent diversification

The 3 months correlation between CapMan and Aspocomp is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CapMan Oyj B and Aspocomp Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspocomp Group Oyj and CapMan 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 CapMan Oyj B are associated (or correlated) with Aspocomp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspocomp Group Oyj has no effect on the direction of CapMan Oyj i.e., CapMan Oyj and Aspocomp Group go up and down completely randomly.

Pair Corralation between CapMan Oyj and Aspocomp Group

Assuming the 90 days trading horizon CapMan Oyj is expected to generate 1.56 times less return on investment than Aspocomp Group. But when comparing it to its historical volatility, CapMan Oyj B is 1.64 times less risky than Aspocomp Group. It trades about 0.12 of its potential returns per unit of risk. Aspocomp Group Oyj is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Aspocomp Group Oyj on October 8, 2024 and sell it today you would earn a total of  13.00  from holding Aspocomp Group Oyj or generate 4.26% return on investment over 90 days.

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

CapMan Oyj B  vs.  Aspocomp Group Oyj

CapMan Oyj B

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aspocomp Group Oyj

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aspocomp Group Oyj are ranked lower than 7 (%) 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.

Pair Trading with CapMan Oyj and Aspocomp Group

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

The idea behind CapMan Oyj B and Aspocomp Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.