Correlation Between Spinnova and HKFoods Oyj

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

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

Diversification Opportunities for Spinnova and HKFoods Oyj

-0.68

Correlation Coefficient

Spinnova  HKFoods Oyj

Excellent diversification

The 3 months correlation between Spinnova and HKFoods is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Spinnova Oy and HKFoods Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HKFoods Oyj A and Spinnova 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 Spinnova Oy are associated (or correlated) with HKFoods Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HKFoods Oyj A has no effect on the direction of Spinnova i.e., Spinnova and HKFoods Oyj go up and down completely randomly.

Pair Corralation between Spinnova and HKFoods Oyj

Assuming the 90 days trading horizon Spinnova Oy is expected to under-perform the HKFoods Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Spinnova Oy is 1.09 times less risky than HKFoods Oyj. The stock trades about -0.13 of its potential returns per unit of risk. The HKFoods Oyj A is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  62.00  in HKFoods Oyj A on September 13, 2024 and sell it today you would earn a total of  19.00  from holding HKFoods Oyj A or generate 30.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Spinnova Oy  vs.  HKFoods Oyj A

Spinnova Oy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spinnova Oy 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

HKFoods Oyj A

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HKFoods Oyj A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, HKFoods Oyj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spinnova and HKFoods Oyj

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

The idea behind Spinnova Oy and HKFoods 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.