Correlation Between Kamux Suomi and Reka Industrial

Can any of the company-specific risk be diversified away by investing in both Kamux Suomi and Reka Industrial 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 Reka Industrial 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 Reka Industrial Oyj, you can compare the effects of market volatilities on Kamux Suomi and Reka Industrial 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 Reka Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamux Suomi and Reka Industrial.

Diversification Opportunities for Kamux Suomi and Reka Industrial

0.64

Correlation Coefficient

Kamux Suomi  Reka Industrial

Poor diversification

The 3 months correlation between Kamux and Reka is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kamux Suomi Oy and Reka Industrial Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reka Industrial 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 Reka Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reka Industrial Oyj has no effect on the direction of Kamux Suomi i.e., Kamux Suomi and Reka Industrial go up and down completely randomly.

Pair Corralation between Kamux Suomi and Reka Industrial

Assuming the 90 days trading horizon Kamux Suomi Oy is expected to under-perform the Reka Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Kamux Suomi Oy is 1.53 times less risky than Reka Industrial. The stock trades about -0.07 of its potential returns per unit of risk. The Reka Industrial Oyj is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  469.00  in Reka Industrial Oyj on September 14, 2024 and sell it today you would lose (2.00) from holding Reka Industrial Oyj or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Kamux Suomi Oy  vs.  Reka Industrial Oyj

Kamux Suomi Oy

Risk-Adjusted Performance

0 of 100

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.

Reka Industrial Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reka Industrial Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Reka Industrial is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kamux Suomi and Reka Industrial

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

The idea behind Kamux Suomi Oy and Reka Industrial 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.