Correlation Between Detection Technology and Revenio

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

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

Diversification Opportunities for Detection Technology and Revenio

0.22

Correlation Coefficient

Detection Technology  Revenio

Modest diversification

The 3 months correlation between Detection and Revenio is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Detection Technology OY and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group and Detection Technology 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 Detection Technology OY are associated (or correlated) with Revenio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revenio Group has no effect on the direction of Detection Technology i.e., Detection Technology and Revenio go up and down completely randomly.

Pair Corralation between Detection Technology and Revenio

Assuming the 90 days trading horizon Detection Technology OY is expected to generate 0.94 times more return on investment than Revenio. However, Detection Technology OY is 1.07 times less risky than Revenio. It trades about -0.05 of its potential returns per unit of risk. Revenio Group is currently generating about -0.08 per unit of risk. If you would invest  1,855  in Detection Technology OY on November 20, 2024 and sell it today you would lose (220.00) from holding Detection Technology OY or give up 11.86% of portfolio value over 90 days.

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

Detection Technology OY  vs.  Revenio Group

Detection Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Detection Technology OY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Detection Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Revenio Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Revenio Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Revenio is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Detection Technology and Revenio

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

The idea behind Detection Technology OY and Revenio Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.