Correlation Between Trainers House and Toivo Group

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

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

Diversification Opportunities for Trainers House and Toivo Group

-0.16

Correlation Coefficient

Trainers House  Toivo Group

Good diversification

The 3 months correlation between Trainers and Toivo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and Toivo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toivo Group Oyj and Trainers House 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 Trainers House Oyj are associated (or correlated) with Toivo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toivo Group Oyj has no effect on the direction of Trainers House i.e., Trainers House and Toivo Group go up and down completely randomly.

Pair Corralation between Trainers House and Toivo Group

Assuming the 90 days trading horizon Trainers House Oyj is expected to generate 1.31 times more return on investment than Toivo Group. However, Trainers House is 1.31 times more volatile than Toivo Group Oyj. It trades about 0.04 of its potential returns per unit of risk. Toivo Group Oyj is currently generating about -0.08 per unit of risk. If you would invest  228.00  in Trainers House Oyj on October 25, 2024 and sell it today you would earn a total of  12.00  from holding Trainers House Oyj or generate 5.26% return on investment over 90 days.

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

Trainers House Oyj  vs.  Toivo Group Oyj

Trainers House Oyj

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trainers House Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Trainers House may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Trainers House and Toivo Group

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

The idea behind Trainers House Oyj and Toivo Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.