Correlation Between Toivo Group and HKFoods Oyj

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

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

Diversification Opportunities for Toivo Group and HKFoods Oyj

-0.61

Correlation Coefficient

Toivo Group  HKFoods Oyj

Excellent diversification

The 3 months correlation between Toivo and HKFoods is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Toivo Group Oyj 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 Toivo 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 Toivo Group Oyj 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 Toivo Group i.e., Toivo Group and HKFoods Oyj go up and down completely randomly.

Pair Corralation between Toivo Group and HKFoods Oyj

Assuming the 90 days trading horizon Toivo Group Oyj is expected to under-perform the HKFoods Oyj. In addition to that, Toivo Group is 1.03 times more volatile than HKFoods Oyj A. It trades about -0.01 of its total potential returns per unit of risk. HKFoods Oyj A is currently generating about 0.05 per unit of volatility. If you would invest  70.00  in HKFoods Oyj A on October 11, 2024 and sell it today you would earn a total of  15.00  from holding HKFoods Oyj A or generate 21.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	36.23%
Values	Daily Returns

Toivo Group Oyj  vs.  HKFoods Oyj A

Toivo Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toivo Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains 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 weak basic indicators, HKFoods Oyj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toivo Group and HKFoods Oyj

The main advantage of trading using opposite Toivo Group and HKFoods Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toivo Group 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 Toivo Group Oyj 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.