Correlation Between Orion Oyj and Raisio Oyj

Can any of the company-specific risk be diversified away by investing in both Orion 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 Orion 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 Orion Oyj A and Raisio Oyj Vaihto osake, you can compare the effects of market volatilities on Orion 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 Orion Oyj with a short position of Raisio Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Oyj and Raisio Oyj.

Diversification Opportunities for Orion Oyj and Raisio Oyj

-0.1

Correlation Coefficient

Orion Oyj  Raisio Oyj

Good diversification

The 3 months correlation between Orion and Raisio is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Orion Oyj A 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 Orion 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 Orion Oyj A 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 Orion Oyj i.e., Orion Oyj and Raisio Oyj go up and down completely randomly.

Pair Corralation between Orion Oyj and Raisio Oyj

Assuming the 90 days trading horizon Orion Oyj A is expected to generate 1.83 times more return on investment than Raisio Oyj. However, Orion Oyj is 1.83 times more volatile than Raisio Oyj Vaihto osake. It trades about 0.36 of its potential returns per unit of risk. Raisio Oyj Vaihto osake is currently generating about -0.04 per unit of risk. If you would invest  4,290  in Orion Oyj A on October 25, 2024 and sell it today you would earn a total of  630.00  from holding Orion Oyj A or generate 14.69% return on investment over 90 days.

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

Orion Oyj A  vs.  Raisio Oyj Vaihto osake

Orion Oyj A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orion Oyj A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Orion Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Orion Oyj and Raisio Oyj

The main advantage of trading using opposite Orion Oyj and Raisio Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion 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 Orion Oyj A 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.