Correlation Between Robit Oyj and Afarak Group

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

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

Diversification Opportunities for Robit Oyj and Afarak Group

-0.24

Correlation Coefficient

Robit Oyj  Afarak Group

Very good diversification

The 3 months correlation between Robit and Afarak is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Robit Oyj and Afarak Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afarak Group Oyj and Robit 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 Robit Oyj are associated (or correlated) with Afarak Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afarak Group Oyj has no effect on the direction of Robit Oyj i.e., Robit Oyj and Afarak Group go up and down completely randomly.

Pair Corralation between Robit Oyj and Afarak Group

Assuming the 90 days trading horizon Robit Oyj is expected to generate 0.82 times more return on investment than Afarak Group. However, Robit Oyj is 1.22 times less risky than Afarak Group. It trades about 0.11 of its potential returns per unit of risk. Afarak Group Oyj is currently generating about 0.01 per unit of risk. If you would invest  130.00  in Robit Oyj on December 31, 2024 and sell it today you would earn a total of  20.00  from holding Robit Oyj or generate 15.38% return on investment over 90 days.

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

Robit Oyj  vs.  Afarak Group Oyj

Robit Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robit Oyj are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Robit Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Afarak Group Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Afarak Group Oyj are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Afarak Group is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Robit Oyj and Afarak Group

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

The idea behind Robit Oyj and Afarak 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.