Correlation Between Tokmanni Group and Atria Oyj

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

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

Diversification Opportunities for Tokmanni Group and Atria Oyj

-0.22

Correlation Coefficient

Tokmanni Group  Atria Oyj

Very good diversification

The 3 months correlation between Tokmanni and Atria is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tokmanni Group Oyj 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 Tokmanni Group 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 Tokmanni Group Oyj 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 Tokmanni Group i.e., Tokmanni Group and Atria Oyj go up and down completely randomly.

Pair Corralation between Tokmanni Group and Atria Oyj

Assuming the 90 days trading horizon Tokmanni Group Oyj is expected to generate 1.19 times more return on investment than Atria Oyj. However, Tokmanni Group is 1.19 times more volatile than Atria Oyj A. It trades about 0.01 of its potential returns per unit of risk. Atria Oyj A is currently generating about -0.17 per unit of risk. If you would invest  1,474  in Tokmanni Group Oyj on February 7, 2024 and sell it today you would earn a total of  2.00  from holding Tokmanni Group Oyj or generate 0.14% return on investment over 90 days.

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

Tokmanni Group Oyj  vs.  Atria Oyj A

Tokmanni Group Oyj

Risk-Adjusted Performance

2 of 100

Weak

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

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 Tokmanni Group and Atria Oyj

The main advantage of trading using opposite Tokmanni Group and Atria Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokmanni Group 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 Tokmanni Group Oyj 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.