Correlation Between Harvia Oyj and Honkarakenne Oyj
Can any of the company-specific risk be diversified away by investing in both Harvia 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 Harvia 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 Harvia Oyj and Honkarakenne Oyj B, you can compare the effects of market volatilities on Harvia 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 Harvia Oyj with a short position of Honkarakenne Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvia Oyj and Honkarakenne Oyj.
Diversification Opportunities for Harvia Oyj and Honkarakenne Oyj
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harvia and Honkarakenne is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj 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 Harvia 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 Harvia Oyj 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 Harvia Oyj i.e., Harvia Oyj and Honkarakenne Oyj go up and down completely randomly.
Pair Corralation between Harvia Oyj and Honkarakenne Oyj
Assuming the 90 days trading horizon Harvia Oyj is expected to generate 1.77 times less return on investment than Honkarakenne Oyj. But when comparing it to its historical volatility, Harvia Oyj is 1.32 times less risky than Honkarakenne Oyj. It trades about 0.05 of its potential returns per unit of risk. Honkarakenne Oyj B is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Honkarakenne Oyj B on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Honkarakenne Oyj B or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harvia Oyj vs. Honkarakenne Oyj B
Performance |
| Timeline |
| Harvia Oyj |
| Honkarakenne Oyj B |
Harvia Oyj and Honkarakenne Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvia Oyj and Honkarakenne Oyj
The main advantage of trading using opposite Harvia Oyj and Honkarakenne Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvia 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.| Harvia Oyj vs. Qt Group Oyj | Harvia Oyj vs. Kamux Suomi Oy | Harvia Oyj vs. Sampo Oyj A | Harvia Oyj vs. Tokmanni Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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