Correlation Between Tamtron Group and United Bankers

Can any of the company-specific risk be diversified away by investing in both Tamtron Group and United Bankers 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 United Bankers 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 United Bankers Oyj, you can compare the effects of market volatilities on Tamtron Group and United Bankers 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 United Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamtron Group and United Bankers.

Diversification Opportunities for Tamtron Group and United Bankers

-0.36

Correlation Coefficient

Tamtron Group  United Bankers

Very good diversification

The 3 months correlation between Tamtron and United is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tamtron Group Oyj and United Bankers Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankers 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 United Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankers Oyj has no effect on the direction of Tamtron Group i.e., Tamtron Group and United Bankers go up and down completely randomly.

Pair Corralation between Tamtron Group and United Bankers

Assuming the 90 days trading horizon Tamtron Group Oyj is expected to under-perform the United Bankers. But the stock apears to be less risky and, when comparing its historical volatility, Tamtron Group Oyj is 1.48 times less risky than United Bankers. The stock trades about -0.21 of its potential returns per unit of risk. The United Bankers Oyj is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,810  in United Bankers Oyj on October 8, 2024 and sell it today you would lose (10.00) from holding United Bankers Oyj or give up 0.55% of portfolio value over 90 days.

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

Tamtron Group Oyj  vs.  United Bankers Oyj

Tamtron Group Oyj

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tamtron Group Oyj are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Tamtron Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

United Bankers Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Bankers Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tamtron Group and United Bankers

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

The idea behind Tamtron Group Oyj and United Bankers 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.