Correlation Between Kemira Oyj and Raisio Oyj

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

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

Diversification Opportunities for Kemira Oyj and Raisio Oyj

0.55

Correlation Coefficient

Kemira Oyj  Raisio Oyj

Very weak diversification

The 3 months correlation between Kemira and Raisio is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kemira Oyj and Raisio Oyj Vaihto osake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raisio Oyj Vaihto and Kemira 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 Kemira Oyj are associated (or correlated) with Raisio Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raisio Oyj Vaihto has no effect on the direction of Kemira Oyj i.e., Kemira Oyj and Raisio Oyj go up and down completely randomly.

Pair Corralation between Kemira Oyj and Raisio Oyj

Assuming the 90 days trading horizon Kemira Oyj is expected to generate 1.5 times less return on investment than Raisio Oyj. But when comparing it to its historical volatility, Kemira Oyj is 1.07 times less risky than Raisio Oyj. It trades about 0.1 of its potential returns per unit of risk. Raisio Oyj Vaihto osake is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  213.00  in Raisio Oyj Vaihto osake on October 5, 2024 and sell it today you would earn a total of  8.00  from holding Raisio Oyj Vaihto osake or generate 3.76% return on investment over 90 days.

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

Kemira Oyj  vs.  Raisio Oyj Vaihto osake

Kemira Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Raisio Oyj Vaihto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raisio Oyj Vaihto osake has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Raisio Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kemira Oyj and Raisio Oyj

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

The idea behind Kemira Oyj and Raisio Oyj Vaihto osake 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.