Correlation Between Sitowise Group and Kamux Suomi

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

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

Diversification Opportunities for Sitowise Group and Kamux Suomi

0.65

Correlation Coefficient

Sitowise Group  Kamux Suomi

Poor diversification

The 3 months correlation between Sitowise and Kamux is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sitowise Group Oyj and Kamux Suomi Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamux Suomi Oy and Sitowise 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 Sitowise Group Oyj are associated (or correlated) with Kamux Suomi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamux Suomi Oy has no effect on the direction of Sitowise Group i.e., Sitowise Group and Kamux Suomi go up and down completely randomly.

Pair Corralation between Sitowise Group and Kamux Suomi

Assuming the 90 days trading horizon Sitowise Group Oyj is expected to generate 2.24 times more return on investment than Kamux Suomi. However, Sitowise Group is 2.24 times more volatile than Kamux Suomi Oy. It trades about 0.03 of its potential returns per unit of risk. Kamux Suomi Oy is currently generating about -0.08 per unit of risk. If you would invest  267.00  in Sitowise Group Oyj on September 16, 2024 and sell it today you would earn a total of  8.00  from holding Sitowise Group Oyj or generate 3.0% return on investment over 90 days.

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

Sitowise Group Oyj  vs.  Kamux Suomi Oy

Sitowise Group Oyj

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sitowise Group Oyj are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Sitowise Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Sitowise Group and Kamux Suomi

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

The idea behind Sitowise Group Oyj and Kamux Suomi Oy 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.