Correlation Between Kamux Suomi and Gofore Oyj

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

Diversification Opportunities for Kamux Suomi and Gofore Oyj

0.32

Correlation Coefficient

Kamux Suomi  Gofore Oyj

Weak diversification

The 3 months correlation between Kamux and Gofore is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kamux Suomi Oy and Gofore Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gofore 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 Gofore Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gofore Oyj has no effect on the direction of Kamux Suomi i.e., Kamux Suomi and Gofore Oyj go up and down completely randomly.

Pair Corralation between Kamux Suomi and Gofore Oyj

Assuming the 90 days trading horizon Kamux Suomi Oy is expected to generate 1.59 times more return on investment than Gofore Oyj. However, Kamux Suomi is 1.59 times more volatile than Gofore Oyj. It trades about 0.02 of its potential returns per unit of risk. Gofore Oyj is currently generating about -0.11 per unit of risk. If you would invest  250.00  in Kamux Suomi Oy on December 22, 2024 and sell it today you would earn a total of  3.00  from holding Kamux Suomi Oy or generate 1.2% return on investment over 90 days.

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

Kamux Suomi Oy  vs.  Gofore Oyj

Kamux Suomi Oy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kamux Suomi Oy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Gofore Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gofore Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kamux Suomi and Gofore Oyj

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

The idea behind Kamux Suomi Oy and Gofore 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.