Correlation Between Martela Oyj and Viking Line

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

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

Diversification Opportunities for Martela Oyj and Viking Line

-0.46

Correlation Coefficient

Martela Oyj  Viking Line

Very good diversification

The 3 months correlation between Martela and Viking is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Martela Oyj A and Viking Line Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Line Abp and Martela 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 Martela Oyj A are associated (or correlated) with Viking Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Line Abp has no effect on the direction of Martela Oyj i.e., Martela Oyj and Viking Line go up and down completely randomly.

Pair Corralation between Martela Oyj and Viking Line

Assuming the 90 days trading horizon Martela Oyj is expected to generate 2.42 times less return on investment than Viking Line. But when comparing it to its historical volatility, Martela Oyj A is 1.72 times less risky than Viking Line. It trades about 0.15 of its potential returns per unit of risk. Viking Line Abp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,057  in Viking Line Abp on February 7, 2024 and sell it today you would earn a total of  193.00  from holding Viking Line Abp or generate 9.38% return on investment over 90 days.

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

Martela Oyj A  vs.  Viking Line Abp

Martela Oyj A

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Martela Oyj A are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Martela Oyj is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Viking Line Abp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viking Line Abp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Viking Line demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Martela Oyj and Viking Line

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

The idea behind Martela Oyj A and Viking Line Abp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.