Correlation Between Kamux Suomi and Kempower Oyj

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kamux Suomi and Kempower 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 Kamux Suomi and Kempower Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamux Suomi Oy and Kempower Oyj, you can compare the effects of market volatilities on Kamux Suomi and Kempower 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 Kamux Suomi with a short position of Kempower Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamux Suomi and Kempower Oyj.

Diversification Opportunities for Kamux Suomi and Kempower Oyj

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Kamux and Kempower is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kamux Suomi Oy and Kempower Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kempower Oyj and Kamux Suomi 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 Kamux Suomi Oy are associated (or correlated) with Kempower Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kempower Oyj has no effect on the direction of Kamux Suomi i.e., Kamux Suomi and Kempower Oyj go up and down completely randomly.

Pair Corralation between Kamux Suomi and Kempower Oyj

Assuming the 90 days trading horizon Kamux Suomi Oy is expected to generate 0.64 times more return on investment than Kempower Oyj. However, Kamux Suomi Oy is 1.56 times less risky than Kempower Oyj. It trades about -0.1 of its potential returns per unit of risk. Kempower Oyj is currently generating about -0.11 per unit of risk. If you would invest  383.00  in Kamux Suomi Oy on September 17, 2024 and sell it today you would lose (41.00) from holding Kamux Suomi Oy or give up 10.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Kamux Suomi Oy  vs.  Kempower Oyj

 Performance 
       Timeline  
Kamux Suomi Oy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kamux Suomi Oy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.
Kempower Oyj 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kempower Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kamux Suomi and Kempower Oyj Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kamux Suomi and Kempower Oyj

The main advantage of trading using opposite Kamux Suomi and Kempower Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamux Suomi position performs unexpectedly, Kempower 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 Kempower Oyj will offset losses from the drop in Kempower Oyj's long position.
The idea behind Kamux Suomi Oy and Kempower 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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings