Correlation Between Harvia Oyj and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Harvia Oyj and Wartsila 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 Wartsila 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 Wartsila Oyj Abp, you can compare the effects of market volatilities on Harvia Oyj and Wartsila 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 Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvia Oyj and Wartsila Oyj.
Diversification Opportunities for Harvia Oyj and Wartsila Oyj
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harvia and Wartsila is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp 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 Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Harvia Oyj i.e., Harvia Oyj and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Harvia Oyj and Wartsila Oyj
Assuming the 90 days trading horizon Harvia Oyj is expected to generate 0.89 times more return on investment than Wartsila Oyj. However, Harvia Oyj is 1.12 times less risky than Wartsila Oyj. It trades about 0.03 of its potential returns per unit of risk. Wartsila Oyj Abp is currently generating about -0.08 per unit of risk. If you would invest 4,238 in Harvia Oyj on September 2, 2024 and sell it today you would earn a total of 142.00 from holding Harvia Oyj or generate 3.35% 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. Wartsila Oyj Abp
Performance |
| Timeline |
| Harvia Oyj |
| Wartsila Oyj Abp |
Harvia Oyj and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harvia Oyj and Wartsila Oyj
The main advantage of trading using opposite Harvia Oyj and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvia Oyj position performs unexpectedly, Wartsila 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 Wartsila Oyj will offset losses from the drop in Wartsila 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 |
| Wartsila Oyj vs. Admicom Oyj | Wartsila Oyj vs. Vincit Group Oyj | Wartsila Oyj vs. Harvia Oyj | Wartsila Oyj 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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