Correlation Between Biohit Oyj and Honkarakenne Oyj
Can any of the company-specific risk be diversified away by investing in both Biohit Oyj and Honkarakenne 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 Biohit Oyj and Honkarakenne Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biohit Oyj B and Honkarakenne Oyj B, you can compare the effects of market volatilities on Biohit Oyj and Honkarakenne 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 Biohit Oyj with a short position of Honkarakenne Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biohit Oyj and Honkarakenne Oyj.
Diversification Opportunities for Biohit Oyj and Honkarakenne Oyj
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biohit and Honkarakenne is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Biohit Oyj B and Honkarakenne Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honkarakenne Oyj B and Biohit Oyj 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 Biohit Oyj B are associated (or correlated) with Honkarakenne Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honkarakenne Oyj B has no effect on the direction of Biohit Oyj i.e., Biohit Oyj and Honkarakenne Oyj go up and down completely randomly.
Pair Corralation between Biohit Oyj and Honkarakenne Oyj
Assuming the 90 days trading horizon Biohit Oyj B is expected to generate 1.12 times more return on investment than Honkarakenne Oyj. However, Biohit Oyj is 1.12 times more volatile than Honkarakenne Oyj B. It trades about 0.04 of its potential returns per unit of risk. Honkarakenne Oyj B is currently generating about -0.03 per unit of risk. If you would invest 186.00 in Biohit Oyj B on January 24, 2025 and sell it today you would earn a total of 65.00 from holding Biohit Oyj B or generate 34.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Biohit Oyj B vs. Honkarakenne Oyj B
Performance |
| Timeline |
| Biohit Oyj B |
| Honkarakenne Oyj B |
Biohit Oyj and Honkarakenne Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biohit Oyj and Honkarakenne Oyj
The main advantage of trading using opposite Biohit Oyj and Honkarakenne Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biohit Oyj position performs unexpectedly, Honkarakenne 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 Honkarakenne Oyj will offset losses from the drop in Honkarakenne Oyj's long position.| Biohit Oyj vs. Bittium Oyj | Biohit Oyj vs. Dovre Group Plc | Biohit Oyj vs. Afarak Group Oyj | Biohit Oyj vs. Tecnotree Oyj |
| Honkarakenne Oyj vs. Tokmanni Group Oyj | Honkarakenne Oyj vs. Harvia Oyj | Honkarakenne Oyj vs. CapMan Oyj B | Honkarakenne Oyj vs. Kamux Suomi Oy |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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