Correlation Between Davide Campari and Altia Oyj

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

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

Diversification Opportunities for Davide Campari and Altia Oyj

0.81

Correlation Coefficient

Davide Campari  Altia Oyj

Very poor diversification

The 3 months correlation between Davide and Altia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Davide Campari Milano and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj and Davide Campari 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 Davide Campari Milano are associated (or correlated) with Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of Davide Campari i.e., Davide Campari and Altia Oyj go up and down completely randomly.

Pair Corralation between Davide Campari and Altia Oyj

Assuming the 90 days horizon Davide Campari Milano is expected to generate 1.43 times more return on investment than Altia Oyj. However, Davide Campari is 1.43 times more volatile than Altia Oyj. It trades about -0.09 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.23 per unit of risk. If you would invest  746.00  in Davide Campari Milano on September 26, 2024 and sell it today you would lose (149.00) from holding Davide Campari Milano or give up 19.97% of portfolio value over 90 days.

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

Davide Campari Milano  vs.  Altia Oyj

Davide Campari Milano

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Davide Campari Milano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Altia Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Davide Campari and Altia Oyj

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

The idea behind Davide Campari Milano and Altia 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .