Correlation Between Trainers House and Robit Oyj

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

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

Diversification Opportunities for Trainers House and Robit Oyj

0.59

Correlation Coefficient

Trainers House  Robit Oyj

Very weak diversification

The 3 months correlation between Trainers and Robit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit Oyj and Trainers House 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 Trainers House Oyj are associated (or correlated) with Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Trainers House i.e., Trainers House and Robit Oyj go up and down completely randomly.

Pair Corralation between Trainers House and Robit Oyj

Assuming the 90 days trading horizon Trainers House Oyj is expected to generate 1.35 times more return on investment than Robit Oyj. However, Trainers House is 1.35 times more volatile than Robit Oyj. It trades about -0.03 of its potential returns per unit of risk. Robit Oyj is currently generating about -0.13 per unit of risk. If you would invest  227.00  in Trainers House Oyj on September 29, 2024 and sell it today you would lose (17.00) from holding Trainers House Oyj or give up 7.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Trainers House Oyj  vs.  Robit Oyj

Trainers House Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trainers House Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Trainers House is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Robit Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robit Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Trainers House and Robit Oyj

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

The idea behind Trainers House Oyj and Robit 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.