Correlation Between CapMan Oyj and Toivo Group

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

Diversification Opportunities for CapMan Oyj and Toivo Group

0.26

Correlation Coefficient

CapMan Oyj  Toivo Group

Modest diversification

The 3 months correlation between CapMan and Toivo is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CapMan Oyj B and Toivo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toivo 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 Toivo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toivo Group Oyj has no effect on the direction of CapMan Oyj i.e., CapMan Oyj and Toivo Group go up and down completely randomly.

Pair Corralation between CapMan Oyj and Toivo Group

Assuming the 90 days trading horizon CapMan Oyj B is expected to generate 0.67 times more return on investment than Toivo Group. However, CapMan Oyj B is 1.49 times less risky than Toivo Group. It trades about 0.16 of its potential returns per unit of risk. Toivo Group Oyj is currently generating about -0.05 per unit of risk. If you would invest  173.00  in CapMan Oyj B on December 24, 2024 and sell it today you would earn a total of  29.00  from holding CapMan Oyj B or generate 16.76% return on investment over 90 days.

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

CapMan Oyj B  vs.  Toivo Group Oyj

CapMan Oyj B

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CapMan Oyj B are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CapMan Oyj sustained solid returns over the last few months and may actually be approaching a breakup point.

Toivo Group Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Toivo Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with CapMan Oyj and Toivo Group

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

The idea behind CapMan Oyj B and Toivo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.