Correlation Between Kamux Suomi and Admicom Oyj

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

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

Diversification Opportunities for Kamux Suomi and Admicom Oyj

0.11

Correlation Coefficient

Kamux Suomi  Admicom Oyj

Average diversification

The 3 months correlation between Kamux and Admicom is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kamux Suomi Oy and Admicom Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admicom Oyj and Kamux Suomi 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 Kamux Suomi Oy are associated (or correlated) with Admicom Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admicom Oyj has no effect on the direction of Kamux Suomi i.e., Kamux Suomi and Admicom Oyj go up and down completely randomly.

Pair Corralation between Kamux Suomi and Admicom Oyj

Assuming the 90 days trading horizon Kamux Suomi Oy is expected to under-perform the Admicom Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Kamux Suomi Oy is 1.03 times less risky than Admicom Oyj. The stock trades about -0.01 of its potential returns per unit of risk. The Admicom Oyj is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,686  in Admicom Oyj on December 29, 2024 and sell it today you would earn a total of  684.00  from holding Admicom Oyj or generate 14.6% return on investment over 90 days.

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

Kamux Suomi Oy  vs.  Admicom Oyj

Kamux Suomi Oy

Risk-Adjusted Performance

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 fairly strong technical indicators, Kamux Suomi is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Admicom Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Admicom Oyj are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Admicom Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamux Suomi and Admicom Oyj

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

The idea behind Kamux Suomi Oy and Admicom 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.