Correlation Between Outokumpu Oyj and Atria Oyj

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

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

Diversification Opportunities for Outokumpu Oyj and Atria Oyj

0.39

Correlation Coefficient

Outokumpu Oyj  Atria Oyj

Weak diversification

The 3 months correlation between Outokumpu and Atria is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj and Atria Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atria Oyj A and Outokumpu 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 Outokumpu Oyj are associated (or correlated) with Atria Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atria Oyj A has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and Atria Oyj go up and down completely randomly.

Pair Corralation between Outokumpu Oyj and Atria Oyj

Assuming the 90 days trading horizon Outokumpu Oyj is expected to generate 1.36 times more return on investment than Atria Oyj. However, Outokumpu Oyj is 1.36 times more volatile than Atria Oyj A. It trades about 0.23 of its potential returns per unit of risk. Atria Oyj A is currently generating about 0.12 per unit of risk. If you would invest  290.00  in Outokumpu Oyj on December 24, 2024 and sell it today you would earn a total of  88.00  from holding Outokumpu Oyj or generate 30.34% return on investment over 90 days.

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

Outokumpu Oyj  vs.  Atria Oyj A

Outokumpu Oyj

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outokumpu Oyj are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Outokumpu Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Atria Oyj A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atria Oyj A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Atria Oyj may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Outokumpu Oyj and Atria Oyj

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

The idea behind Outokumpu Oyj and Atria 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.