Correlation Between Viafin Service and Orion Oyj

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

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

Diversification Opportunities for Viafin Service and Orion Oyj

-0.61

Correlation Coefficient

Viafin Service  Orion Oyj

Excellent diversification

The 3 months correlation between Viafin and Orion is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj and Orion Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Oyj A and Viafin Service 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 Viafin Service Oyj are associated (or correlated) with Orion Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Oyj A has no effect on the direction of Viafin Service i.e., Viafin Service and Orion Oyj go up and down completely randomly.

Pair Corralation between Viafin Service and Orion Oyj

Assuming the 90 days trading horizon Viafin Service Oyj is expected to generate 1.04 times more return on investment than Orion Oyj. However, Viafin Service is 1.04 times more volatile than Orion Oyj A. It trades about 0.07 of its potential returns per unit of risk. Orion Oyj A is currently generating about -0.05 per unit of risk. If you would invest  1,800  in Viafin Service Oyj on September 13, 2024 and sell it today you would earn a total of  120.00  from holding Viafin Service Oyj or generate 6.67% return on investment over 90 days.

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

Viafin Service Oyj  vs.  Orion Oyj A

Viafin Service Oyj

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viafin Service Oyj are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Viafin Service may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Orion Oyj A

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Viafin Service and Orion Oyj

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

The idea behind Viafin Service Oyj and Orion Oyj A 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.