Correlation Between Oriola KD and HKFoods Oyj

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

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

Diversification Opportunities for Oriola KD and HKFoods Oyj

-0.12

Correlation Coefficient

Oriola KD  HKFoods Oyj

Good diversification

The 3 months correlation between Oriola and HKFoods is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Oriola KD Oyj A and HKFoods Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HKFoods Oyj A and Oriola KD 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 Oriola KD Oyj A are associated (or correlated) with HKFoods Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HKFoods Oyj A has no effect on the direction of Oriola KD i.e., Oriola KD and HKFoods Oyj go up and down completely randomly.

Pair Corralation between Oriola KD and HKFoods Oyj

Assuming the 90 days trading horizon Oriola KD Oyj A is expected to generate 0.63 times more return on investment than HKFoods Oyj. However, Oriola KD Oyj A is 1.58 times less risky than HKFoods Oyj. It trades about 0.14 of its potential returns per unit of risk. HKFoods Oyj A is currently generating about -0.12 per unit of risk. If you would invest  92.00  in Oriola KD Oyj A on October 5, 2024 and sell it today you would earn a total of  3.00  from holding Oriola KD Oyj A or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Oriola KD Oyj A  vs.  HKFoods Oyj A

Oriola KD Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

HKFoods Oyj A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HKFoods Oyj A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, HKFoods Oyj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oriola KD and HKFoods Oyj

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

The idea behind Oriola KD Oyj A and HKFoods Oyj A 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.