Correlation Between Oriola KD and Oma Saastopankki
Can any of the company-specific risk be diversified away by investing in both Oriola KD and Oma Saastopankki 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 Oma Saastopankki 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 Oma Saastopankki Oyj, you can compare the effects of market volatilities on Oriola KD and Oma Saastopankki 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 Oma Saastopankki. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriola KD and Oma Saastopankki.
Diversification Opportunities for Oriola KD and Oma Saastopankki
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oriola and Oma is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oriola KD Oyj A and Oma Saastopankki Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oma Saastopankki Oyj 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 Oma Saastopankki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oma Saastopankki Oyj has no effect on the direction of Oriola KD i.e., Oriola KD and Oma Saastopankki go up and down completely randomly.
Pair Corralation between Oriola KD and Oma Saastopankki
Assuming the 90 days trading horizon Oriola KD Oyj A is expected to generate 0.44 times more return on investment than Oma Saastopankki. However, Oriola KD Oyj A is 2.27 times less risky than Oma Saastopankki. It trades about -0.02 of its potential returns per unit of risk. Oma Saastopankki Oyj is currently generating about -0.15 per unit of risk. If you would invest 97.00 in Oriola KD Oyj A on October 5, 2024 and sell it today you would lose (2.00) from holding Oriola KD Oyj A or give up 2.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Oriola KD Oyj A vs. Oma Saastopankki Oyj
Performance |
Timeline |
Oriola KD Oyj |
Oma Saastopankki Oyj |
Oriola KD and Oma Saastopankki Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oriola KD and Oma Saastopankki
The main advantage of trading using opposite Oriola KD and Oma Saastopankki positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriola KD position performs unexpectedly, Oma Saastopankki 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 Oma Saastopankki will offset losses from the drop in Oma Saastopankki's long position.Oriola KD vs. Oriola KD Oyj B | Oriola KD vs. Vaisala Oyj A | Oriola KD vs. KONE Oyj | Oriola KD vs. Boreo Oyj |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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