Correlation Between Glaston Oyj and Bittium Oyj

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

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

Diversification Opportunities for Glaston Oyj and Bittium Oyj

-0.52

Correlation Coefficient

Glaston Oyj  Bittium Oyj

Excellent diversification

The 3 months correlation between Glaston and Bittium is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Glaston Oyj Abp and Bittium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bittium Oyj and Glaston 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 Glaston Oyj Abp 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 Glaston Oyj i.e., Glaston Oyj and Bittium Oyj go up and down completely randomly.

Pair Corralation between Glaston Oyj and Bittium Oyj

Assuming the 90 days trading horizon Glaston Oyj Abp is expected to under-perform the Bittium Oyj. In addition to that, Glaston Oyj is 1.06 times more volatile than Bittium Oyj. It trades about -0.09 of its total potential returns per unit of risk. Bittium Oyj is currently generating about 0.15 per unit of volatility. If you would invest  666.00  in Bittium Oyj on September 13, 2024 and sell it today you would earn a total of  36.00  from holding Bittium Oyj or generate 5.41% return on investment over 90 days.

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

Glaston Oyj Abp  vs.  Bittium Oyj

Glaston Oyj Abp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glaston Oyj Abp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Bittium Oyj

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bittium Oyj are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Bittium Oyj may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Glaston Oyj and Bittium Oyj

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

The idea behind Glaston Oyj Abp and Bittium 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.