Correlation Between Lassila Tikanoja and Digia Oyj
Can any of the company-specific risk be diversified away by investing in both Lassila Tikanoja and Digia 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 Lassila Tikanoja and Digia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lassila Tikanoja Oyj and Digia Oyj, you can compare the effects of market volatilities on Lassila Tikanoja and Digia 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 Lassila Tikanoja with a short position of Digia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassila Tikanoja and Digia Oyj.
Diversification Opportunities for Lassila Tikanoja and Digia Oyj
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lassila and Digia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lassila Tikanoja Oyj and Digia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digia Oyj and Lassila Tikanoja 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 Lassila Tikanoja Oyj are associated (or correlated) with Digia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digia Oyj has no effect on the direction of Lassila Tikanoja i.e., Lassila Tikanoja and Digia Oyj go up and down completely randomly.
Pair Corralation between Lassila Tikanoja and Digia Oyj
Assuming the 90 days trading horizon Lassila Tikanoja Oyj is expected to generate 0.6 times more return on investment than Digia Oyj. However, Lassila Tikanoja Oyj is 1.67 times less risky than Digia Oyj. It trades about 0.45 of its potential returns per unit of risk. Digia Oyj is currently generating about 0.0 per unit of risk. If you would invest 778.00 in Lassila Tikanoja Oyj on October 23, 2024 and sell it today you would earn a total of 52.00 from holding Lassila Tikanoja Oyj or generate 6.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lassila Tikanoja Oyj vs. Digia Oyj
Performance |
Timeline |
Lassila Tikanoja Oyj |
Digia Oyj |
Lassila Tikanoja and Digia Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lassila Tikanoja and Digia Oyj
The main advantage of trading using opposite Lassila Tikanoja and Digia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lassila Tikanoja position performs unexpectedly, Digia 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 Digia Oyj will offset losses from the drop in Digia Oyj's long position.Lassila Tikanoja vs. Tokmanni Group Oyj | Lassila Tikanoja vs. TietoEVRY Corp | Lassila Tikanoja vs. Kemira Oyj | Lassila Tikanoja vs. Konecranes Plc |
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Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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