Correlation Between Remedy Entertainment and Bittium Oyj
Can any of the company-specific risk be diversified away by investing in both Remedy Entertainment and Bittium 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 Remedy Entertainment and Bittium Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remedy Entertainment Oyj and Bittium Oyj, you can compare the effects of market volatilities on Remedy Entertainment and Bittium 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 Remedy Entertainment with a short position of Bittium Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remedy Entertainment and Bittium Oyj.
Diversification Opportunities for Remedy Entertainment and Bittium Oyj
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Remedy and Bittium is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Remedy Entertainment Oyj and Bittium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bittium Oyj and Remedy Entertainment 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 Remedy Entertainment Oyj are associated (or correlated) with Bittium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bittium Oyj has no effect on the direction of Remedy Entertainment i.e., Remedy Entertainment and Bittium Oyj go up and down completely randomly.
Pair Corralation between Remedy Entertainment and Bittium Oyj
Assuming the 90 days trading horizon Remedy Entertainment Oyj is expected to generate 0.94 times more return on investment than Bittium Oyj. However, Remedy Entertainment Oyj is 1.07 times less risky than Bittium Oyj. It trades about 0.3 of its potential returns per unit of risk. Bittium Oyj is currently generating about 0.17 per unit of risk. If you would invest 1,650 in Remedy Entertainment Oyj on February 4, 2024 and sell it today you would earn a total of 360.00 from holding Remedy Entertainment Oyj or generate 21.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Remedy Entertainment Oyj vs. Bittium Oyj
Performance |
Timeline |
Remedy Entertainment Oyj |
Bittium Oyj |
Remedy Entertainment and Bittium Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Remedy Entertainment and Bittium Oyj
The main advantage of trading using opposite Remedy Entertainment and Bittium Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remedy Entertainment position performs unexpectedly, Bittium 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 Bittium Oyj will offset losses from the drop in Bittium Oyj's long position.Remedy Entertainment vs. Harvia Oyj | Remedy Entertainment vs. Qt Group Oyj | Remedy Entertainment vs. Kamux Suomi Oy | Remedy Entertainment vs. Revenio Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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