Correlation Between Tamtron Group and Remedy Entertainment

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

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

Diversification Opportunities for Tamtron Group and Remedy Entertainment

0.35

Correlation Coefficient

Tamtron Group  Remedy Entertainment

Weak diversification

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

Pair Corralation between Tamtron Group and Remedy Entertainment

Assuming the 90 days trading horizon Tamtron Group Oyj is expected to generate 1.0 times more return on investment than Remedy Entertainment. However, Tamtron Group Oyj is 1.0 times less risky than Remedy Entertainment. It trades about 0.0 of its potential returns per unit of risk. Remedy Entertainment Oyj is currently generating about -0.01 per unit of risk. 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

Tamtron Group Oyj  vs.  Remedy Entertainment Oyj

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.

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.

Pair Trading with Tamtron Group and Remedy Entertainment

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

The idea behind Tamtron Group Oyj and Remedy Entertainment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.