Correlation Between Innofactor Oyj and Honkarakenne Oyj
Can any of the company-specific risk be diversified away by investing in both Innofactor 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 Innofactor 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 Innofactor Oyj and Honkarakenne Oyj B, you can compare the effects of market volatilities on Innofactor 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 Innofactor Oyj with a short position of Honkarakenne Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innofactor Oyj and Honkarakenne Oyj.
Diversification Opportunities for Innofactor Oyj and Honkarakenne Oyj
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innofactor and Honkarakenne is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Innofactor 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 Innofactor 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 Innofactor 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 Innofactor Oyj i.e., Innofactor Oyj and Honkarakenne Oyj go up and down completely randomly.
Pair Corralation between Innofactor Oyj and Honkarakenne Oyj
Assuming the 90 days trading horizon Innofactor Oyj is expected to generate 4.46 times less return on investment than Honkarakenne Oyj. But when comparing it to its historical volatility, Innofactor Oyj is 7.0 times less risky than Honkarakenne Oyj. It trades about 0.15 of its potential returns per unit of risk. Honkarakenne Oyj B is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 267.00 in Honkarakenne Oyj B on January 28, 2025 and sell it today you would earn a total of 13.00 from holding Honkarakenne Oyj B or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Innofactor Oyj vs. Honkarakenne Oyj B
Performance |
| Timeline |
| Innofactor Oyj |
| Honkarakenne Oyj B |
Innofactor Oyj and Honkarakenne Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innofactor Oyj and Honkarakenne Oyj
The main advantage of trading using opposite Innofactor Oyj and Honkarakenne Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innofactor 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.| Innofactor Oyj vs. Tecnotree Oyj | Innofactor Oyj vs. Solteq PLC | Innofactor Oyj vs. TietoEVRY Corp | Innofactor 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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