Correlation Between Honkarakenne Oyj and Biohit Oyj

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Honkarakenne Oyj and Biohit 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 Honkarakenne Oyj and Biohit Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honkarakenne Oyj B and Biohit Oyj B, you can compare the effects of market volatilities on Honkarakenne Oyj and Biohit 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 Honkarakenne Oyj with a short position of Biohit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honkarakenne Oyj and Biohit Oyj.

Diversification Opportunities for Honkarakenne Oyj and Biohit Oyj

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Honkarakenne and Biohit is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Honkarakenne Oyj B and Biohit Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biohit Oyj B and Honkarakenne 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 Honkarakenne Oyj B are associated (or correlated) with Biohit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biohit Oyj B has no effect on the direction of Honkarakenne Oyj i.e., Honkarakenne Oyj and Biohit Oyj go up and down completely randomly.

Pair Corralation between Honkarakenne Oyj and Biohit Oyj

Assuming the 90 days trading horizon Honkarakenne Oyj B is expected to under-perform the Biohit Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Honkarakenne Oyj B is 1.04 times less risky than Biohit Oyj. The stock trades about -0.04 of its potential returns per unit of risk. The Biohit Oyj B is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  201.00  in Biohit Oyj B on September 3, 2024 and sell it today you would earn a total of  28.00  from holding Biohit Oyj B or generate 13.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Honkarakenne Oyj B  vs.  Biohit Oyj B

 Performance 
       Timeline  
Honkarakenne Oyj B 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Biohit Oyj B are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Biohit Oyj may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Honkarakenne Oyj and Biohit Oyj Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Honkarakenne Oyj and Biohit Oyj

The main advantage of trading using opposite Honkarakenne Oyj and Biohit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honkarakenne Oyj position performs unexpectedly, Biohit 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 Biohit Oyj will offset losses from the drop in Biohit Oyj's long position.
The idea behind Honkarakenne Oyj B and Biohit Oyj B 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.
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume