Correlation Between Verkkokauppa Oyj and Trainers House

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

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

Diversification Opportunities for Verkkokauppa Oyj and Trainers House

0.12

Correlation Coefficient

Verkkokauppa Oyj  Trainers House

Average diversification

The 3 months correlation between Verkkokauppa and Trainers is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Verkkokauppa Oyj and Trainers House Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainers House Oyj and Verkkokauppa 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 Verkkokauppa Oyj are associated (or correlated) with Trainers House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainers House Oyj has no effect on the direction of Verkkokauppa Oyj i.e., Verkkokauppa Oyj and Trainers House go up and down completely randomly.

Pair Corralation between Verkkokauppa Oyj and Trainers House

Assuming the 90 days trading horizon Verkkokauppa Oyj is expected to generate 2.86 times less return on investment than Trainers House. But when comparing it to its historical volatility, Verkkokauppa Oyj is 1.46 times less risky than Trainers House. It trades about 0.11 of its potential returns per unit of risk. Trainers House Oyj is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Trainers House Oyj on October 25, 2024 and sell it today you would earn a total of  30.00  from holding Trainers House Oyj or generate 14.29% return on investment over 90 days.

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

Verkkokauppa Oyj  vs.  Trainers House Oyj

Verkkokauppa Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verkkokauppa Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Verkkokauppa Oyj and Trainers House

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

The idea behind Verkkokauppa Oyj and Trainers House 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.