Correlation Between Remedy Entertainment and Tamtron Group

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

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

Diversification Opportunities for Remedy Entertainment and Tamtron Group

0.35

Correlation Coefficient

Remedy Entertainment  Tamtron Group

Weak diversification

The 3 months correlation between Remedy and Tamtron is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Remedy Entertainment Oyj and Tamtron Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamtron Group Oyj and Remedy Entertainment 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 Remedy Entertainment Oyj are associated (or correlated) with Tamtron Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamtron Group Oyj has no effect on the direction of Remedy Entertainment i.e., Remedy Entertainment and Tamtron Group go up and down completely randomly.

Pair Corralation between Remedy Entertainment and Tamtron Group

Assuming the 90 days trading horizon Remedy Entertainment Oyj is expected to under-perform the Tamtron Group. In addition to that, Remedy Entertainment is 1.0 times more volatile than Tamtron Group Oyj. It trades about -0.01 of its total potential returns per unit of risk. Tamtron Group Oyj is currently generating about 0.0 per unit of volatility. If you would invest  544.00  in Tamtron Group Oyj on December 25, 2024 and sell it today you would lose (6.00) from holding Tamtron Group Oyj or give up 1.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Remedy Entertainment Oyj  vs.  Tamtron Group Oyj

Remedy Entertainment Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remedy Entertainment Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Remedy Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tamtron Group Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tamtron Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tamtron Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Remedy Entertainment and Tamtron Group

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

The idea behind Remedy Entertainment Oyj and Tamtron 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.