Correlation Between Aspocomp Group and Best Buy
Can any of the company-specific risk be diversified away by investing in both Aspocomp Group and Best Buy 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 Aspocomp Group and Best Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspocomp Group Oyj and Best Buy Co, you can compare the effects of market volatilities on Aspocomp Group and Best Buy 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 Aspocomp Group with a short position of Best Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspocomp Group and Best Buy.
Diversification Opportunities for Aspocomp Group and Best Buy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aspocomp and Best is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aspocomp Group Oyj and Best Buy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Best Buy and Aspocomp 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 Aspocomp Group Oyj are associated (or correlated) with Best Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Best Buy has no effect on the direction of Aspocomp Group i.e., Aspocomp Group and Best Buy go up and down completely randomly.
Pair Corralation between Aspocomp Group and Best Buy
Assuming the 90 days trading horizon Aspocomp Group Oyj is expected to generate 1.24 times more return on investment than Best Buy. However, Aspocomp Group is 1.24 times more volatile than Best Buy Co. It trades about -0.15 of its potential returns per unit of risk. Best Buy Co is currently generating about -0.22 per unit of risk. If you would invest 324.00 in Aspocomp Group Oyj on January 26, 2024 and sell it today you would lose (19.00) from holding Aspocomp Group Oyj or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aspocomp Group Oyj vs. Best Buy Co
Performance |
| Timeline |
| Aspocomp Group Oyj |
| Best Buy |
Aspocomp Group and Best Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspocomp Group and Best Buy
The main advantage of trading using opposite Aspocomp Group and Best Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspocomp Group position performs unexpectedly, Best Buy 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 Best Buy will offset losses from the drop in Best Buy's long position.| Aspocomp Group vs. Harvia Oyj | Aspocomp Group vs. Kamux Suomi Oy | Aspocomp Group vs. Tokmanni Group Oyj | Aspocomp Group vs. Remedy Entertainment Oyj |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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