Correlation Between Terveystalo and Qt Group

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

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

Diversification Opportunities for Terveystalo and Qt Group

-0.01

Correlation Coefficient

Terveystalo  Qt Group

Good diversification

The 3 months correlation between Terveystalo and QTCOM is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Terveystalo Oy and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group Oyj and Terveystalo 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 Terveystalo Oy are associated (or correlated) with Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Terveystalo i.e., Terveystalo and Qt Group go up and down completely randomly.

Pair Corralation between Terveystalo and Qt Group

Assuming the 90 days trading horizon Terveystalo Oy is expected to generate 0.5 times more return on investment than Qt Group. However, Terveystalo Oy is 1.99 times less risky than Qt Group. It trades about 0.1 of its potential returns per unit of risk. Qt Group Oyj is currently generating about -0.05 per unit of risk. If you would invest  1,006  in Terveystalo Oy on October 24, 2024 and sell it today you would earn a total of  92.00  from holding Terveystalo Oy or generate 9.15% return on investment over 90 days.

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

Terveystalo Oy  vs.  Qt Group Oyj

Terveystalo Oy

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Terveystalo Oy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Terveystalo may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Qt Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qt Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with Terveystalo and Qt Group

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

The idea behind Terveystalo Oy and Qt 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.