Correlation Between Taaleri Oyj and Verkkokauppa Oyj

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

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

Diversification Opportunities for Taaleri Oyj and Verkkokauppa Oyj

-0.57

Correlation Coefficient

Taaleri Oyj  Verkkokauppa Oyj

Excellent diversification

The 3 months correlation between Taaleri and Verkkokauppa is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Taaleri Oyj and Verkkokauppa Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verkkokauppa Oyj and Taaleri 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 Taaleri Oyj are associated (or correlated) with Verkkokauppa Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verkkokauppa Oyj has no effect on the direction of Taaleri Oyj i.e., Taaleri Oyj and Verkkokauppa Oyj go up and down completely randomly.

Pair Corralation between Taaleri Oyj and Verkkokauppa Oyj

Assuming the 90 days trading horizon Taaleri Oyj is expected to under-perform the Verkkokauppa Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Taaleri Oyj is 3.53 times less risky than Verkkokauppa Oyj. The stock trades about -0.05 of its potential returns per unit of risk. The Verkkokauppa Oyj is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Verkkokauppa Oyj on December 26, 2024 and sell it today you would earn a total of  84.00  from holding Verkkokauppa Oyj or generate 64.62% return on investment over 90 days.

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

Taaleri Oyj  vs.  Verkkokauppa Oyj

Taaleri Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taaleri Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Taaleri Oyj is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Verkkokauppa Oyj

Risk-Adjusted Performance

Solid

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

Pair Trading with Taaleri Oyj and Verkkokauppa Oyj

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

The idea behind Taaleri Oyj and Verkkokauppa 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.