Correlation Between Kojamo and Titanium Oyj

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

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

Diversification Opportunities for Kojamo and Titanium Oyj

0.49

Correlation Coefficient

Kojamo  Titanium Oyj

Very weak diversification

The 3 months correlation between Kojamo and Titanium is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kojamo and Titanium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium Oyj and Kojamo 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 Kojamo are associated (or correlated) with Titanium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Oyj has no effect on the direction of Kojamo i.e., Kojamo and Titanium Oyj go up and down completely randomly.

Pair Corralation between Kojamo and Titanium Oyj

Assuming the 90 days trading horizon Kojamo is expected to under-perform the Titanium Oyj. In addition to that, Kojamo is 1.03 times more volatile than Titanium Oyj. It trades about -0.07 of its total potential returns per unit of risk. Titanium Oyj is currently generating about -0.05 per unit of volatility. If you would invest  1,045  in Titanium Oyj on September 30, 2024 and sell it today you would lose (63.00) from holding Titanium Oyj or give up 6.03% of portfolio value over 90 days.

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

Kojamo  vs.  Titanium Oyj

Kojamo

Risk-Adjusted Performance

0 of 100

Very Weak

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

Titanium Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titanium Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Titanium 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 Kojamo and Titanium Oyj

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

The idea behind Kojamo and Titanium 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.