Correlation Between Keskisuomalainen and Atria Oyj

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

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

Diversification Opportunities for Keskisuomalainen and Atria Oyj

0.52

Correlation Coefficient

Keskisuomalainen  Atria Oyj

Very weak diversification

The 3 months correlation between Keskisuomalainen and Atria is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Keskisuomalainen Oyj A and Atria Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atria Oyj A and Keskisuomalainen 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 Keskisuomalainen Oyj A are associated (or correlated) with Atria Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atria Oyj A has no effect on the direction of Keskisuomalainen i.e., Keskisuomalainen and Atria Oyj go up and down completely randomly.

Pair Corralation between Keskisuomalainen and Atria Oyj

Assuming the 90 days trading horizon Keskisuomalainen Oyj A is expected to generate 1.8 times more return on investment than Atria Oyj. However, Keskisuomalainen is 1.8 times more volatile than Atria Oyj A. It trades about 0.02 of its potential returns per unit of risk. Atria Oyj A is currently generating about -0.08 per unit of risk. If you would invest  868.00  in Keskisuomalainen Oyj A on February 5, 2024 and sell it today you would earn a total of  2.00  from holding Keskisuomalainen Oyj A or generate 0.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Keskisuomalainen Oyj A  vs.  Atria Oyj A

Keskisuomalainen Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keskisuomalainen Oyj A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Atria Oyj A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atria Oyj A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Atria Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Keskisuomalainen and Atria Oyj

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

The idea behind Keskisuomalainen Oyj A and Atria 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.