Correlation Between Taaleri Oyj and Robit Oyj

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

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

Diversification Opportunities for Taaleri Oyj and Robit Oyj

0.26

Correlation Coefficient

Taaleri Oyj  Robit Oyj

Modest diversification

The 3 months correlation between Taaleri and Robit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Taaleri Oyj and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit Oyj and Taaleri 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 Taaleri Oyj are associated (or correlated) with Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Taaleri Oyj i.e., Taaleri Oyj and Robit Oyj go up and down completely randomly.

Pair Corralation between Taaleri Oyj and Robit Oyj

Assuming the 90 days trading horizon Taaleri Oyj is expected to under-perform the Robit Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Taaleri Oyj is 1.58 times less risky than Robit Oyj. The stock trades about -0.38 of its potential returns per unit of risk. The Robit Oyj is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  161.00  in Robit Oyj on February 2, 2024 and sell it today you would earn a total of  11.00  from holding Robit Oyj or generate 6.83% return on investment over 90 days.

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

Taaleri Oyj  vs.  Robit Oyj

Taaleri Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Robit Oyj

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robit Oyj are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Robit Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Taaleri Oyj and Robit Oyj

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

The idea behind Taaleri Oyj and Robit 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.