Correlation Between Revenio and Aspocomp Group

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

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

Diversification Opportunities for Revenio and Aspocomp Group

-0.65

Correlation Coefficient

Revenio  Aspocomp Group

Excellent diversification

The 3 months correlation between Revenio and Aspocomp is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Revenio Group and Aspocomp Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspocomp Group Oyj and Revenio 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 Revenio Group are associated (or correlated) with Aspocomp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspocomp Group Oyj has no effect on the direction of Revenio i.e., Revenio and Aspocomp Group go up and down completely randomly.

Pair Corralation between Revenio and Aspocomp Group

Assuming the 90 days trading horizon Revenio Group is expected to under-perform the Aspocomp Group. But the stock apears to be less risky and, when comparing its historical volatility, Revenio Group is 2.0 times less risky than Aspocomp Group. The stock trades about -0.03 of its potential returns per unit of risk. The Aspocomp Group Oyj is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Aspocomp Group Oyj on October 10, 2024 and sell it today you would earn a total of  30.00  from holding Aspocomp Group Oyj or generate 9.84% return on investment over 90 days.

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

Revenio Group  vs.  Aspocomp Group Oyj

Revenio Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revenio Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Aspocomp Group Oyj

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aspocomp Group Oyj are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Aspocomp Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revenio and Aspocomp Group

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

The idea behind Revenio Group and Aspocomp Group Oyj 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.