Correlation Between CapMan Oyj and Kamux Suomi

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

Diversification Opportunities for CapMan Oyj and Kamux Suomi

0.68

Correlation Coefficient

CapMan Oyj  Kamux Suomi

Poor diversification

The 3 months correlation between CapMan and Kamux is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CapMan Oyj B and Kamux Suomi Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamux Suomi Oy 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 Kamux Suomi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamux Suomi Oy has no effect on the direction of CapMan Oyj i.e., CapMan Oyj and Kamux Suomi go up and down completely randomly.

Pair Corralation between CapMan Oyj and Kamux Suomi

Assuming the 90 days trading horizon CapMan Oyj B is expected to generate 0.74 times more return on investment than Kamux Suomi. However, CapMan Oyj B is 1.35 times less risky than Kamux Suomi. It trades about -0.05 of its potential returns per unit of risk. Kamux Suomi Oy is currently generating about -0.04 per unit of risk. If you would invest  258.00  in CapMan Oyj B on October 3, 2024 and sell it today you would lose (87.00) from holding CapMan Oyj B or give up 33.72% of portfolio value over 90 days.

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

CapMan Oyj B  vs.  Kamux Suomi Oy

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.

Kamux Suomi Oy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CapMan Oyj and Kamux Suomi

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

The idea behind CapMan Oyj B and Kamux Suomi Oy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.