Correlation Between Puuilo Oyj and Harvia Oyj
Can any of the company-specific risk be diversified away by investing in both Puuilo Oyj and Harvia 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 Puuilo Oyj and Harvia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puuilo Oyj and Harvia Oyj, you can compare the effects of market volatilities on Puuilo Oyj and Harvia 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 Puuilo Oyj with a short position of Harvia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puuilo Oyj and Harvia Oyj.
Diversification Opportunities for Puuilo Oyj and Harvia Oyj
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puuilo and Harvia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Puuilo Oyj and Harvia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvia Oyj and Puuilo 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 Puuilo Oyj are associated (or correlated) with Harvia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvia Oyj has no effect on the direction of Puuilo Oyj i.e., Puuilo Oyj and Harvia Oyj go up and down completely randomly.
Pair Corralation between Puuilo Oyj and Harvia Oyj
Assuming the 90 days trading horizon Puuilo Oyj is expected to generate 2.38 times less return on investment than Harvia Oyj. But when comparing it to its historical volatility, Puuilo Oyj is 1.49 times less risky than Harvia Oyj. It trades about 0.06 of its potential returns per unit of risk. Harvia Oyj is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,178 in Harvia Oyj on August 31, 2024 and sell it today you would earn a total of 2,202 from holding Harvia Oyj or generate 101.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puuilo Oyj vs. Harvia Oyj
Performance |
| Timeline |
| Puuilo Oyj |
| Harvia Oyj |
Puuilo Oyj and Harvia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puuilo Oyj and Harvia Oyj
The main advantage of trading using opposite Puuilo Oyj and Harvia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puuilo Oyj position performs unexpectedly, Harvia 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 Harvia Oyj will offset losses from the drop in Harvia Oyj's long position.| Puuilo Oyj vs. Kamux Suomi Oy | Puuilo Oyj vs. Harvia Oyj | Puuilo Oyj vs. Qt Group Oyj | Puuilo Oyj vs. Tecnotree Oyj |
| Harvia Oyj vs. Qt Group Oyj | Harvia Oyj vs. Kamux Suomi Oy | Harvia Oyj vs. Sampo Oyj A | Harvia Oyj vs. Tokmanni Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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