Correlation Between Titanium Oyj and Kojamo

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

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

Diversification Opportunities for Titanium Oyj and Kojamo

0.49

Correlation Coefficient

Titanium Oyj  Kojamo

Very weak diversification

The 3 months correlation between Titanium and Kojamo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Titanium Oyj and Kojamo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kojamo and Titanium 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 Titanium Oyj are associated (or correlated) with Kojamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kojamo has no effect on the direction of Titanium Oyj i.e., Titanium Oyj and Kojamo go up and down completely randomly.

Pair Corralation between Titanium Oyj and Kojamo

Assuming the 90 days trading horizon Titanium Oyj is expected to generate 0.97 times more return on investment than Kojamo. However, Titanium Oyj is 1.03 times less risky than Kojamo. It trades about -0.05 of its potential returns per unit of risk. Kojamo is currently generating about -0.07 per unit of risk. If you would invest  1,045  in Titanium Oyj on September 30, 2024 and sell it today you would lose (63.00) from holding Titanium Oyj or give up 6.03% of portfolio value over 90 days.

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

Titanium Oyj  vs.  Kojamo

Titanium Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kojamo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kojamo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking 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 Titanium Oyj and Kojamo

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

The idea behind Titanium Oyj and Kojamo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.