Correlation Between Tokmanni Group and Viking Line

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

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

Diversification Opportunities for Tokmanni Group and Viking Line

0.33

Correlation Coefficient

Tokmanni Group  Viking Line

Weak diversification

The 3 months correlation between Tokmanni and Viking is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tokmanni Group Oyj and Viking Line Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Line Abp and Tokmanni 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 Tokmanni Group Oyj are associated (or correlated) with Viking Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Line Abp has no effect on the direction of Tokmanni Group i.e., Tokmanni Group and Viking Line go up and down completely randomly.

Pair Corralation between Tokmanni Group and Viking Line

Assuming the 90 days trading horizon Tokmanni Group is expected to generate 1.84 times less return on investment than Viking Line. But when comparing it to its historical volatility, Tokmanni Group Oyj is 1.08 times less risky than Viking Line. It trades about 0.04 of its potential returns per unit of risk. Viking Line Abp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,060  in Viking Line Abp on December 24, 2024 and sell it today you would earn a total of  170.00  from holding Viking Line Abp or generate 8.25% return on investment over 90 days.

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

Tokmanni Group Oyj  vs.  Viking Line Abp

Tokmanni Group Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tokmanni Group Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Tokmanni Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Viking Line Abp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viking Line Abp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Viking Line may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tokmanni Group and Viking Line

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

The idea behind Tokmanni Group Oyj and Viking Line Abp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.