Correlation Between Wartsila Oyj and Herantis Pharma
Can any of the company-specific risk be diversified away by investing in both Wartsila Oyj and Herantis Pharma 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 Wartsila Oyj and Herantis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wartsila Oyj Abp and Herantis Pharma Oyj, you can compare the effects of market volatilities on Wartsila Oyj and Herantis Pharma 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 Wartsila Oyj with a short position of Herantis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wartsila Oyj and Herantis Pharma.
Diversification Opportunities for Wartsila Oyj and Herantis Pharma
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wartsila and Herantis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wartsila Oyj Abp and Herantis Pharma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herantis Pharma Oyj and Wartsila 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 Wartsila Oyj Abp are associated (or correlated) with Herantis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herantis Pharma Oyj has no effect on the direction of Wartsila Oyj i.e., Wartsila Oyj and Herantis Pharma go up and down completely randomly.
Pair Corralation between Wartsila Oyj and Herantis Pharma
Assuming the 90 days trading horizon Wartsila Oyj Abp is expected to generate 0.68 times more return on investment than Herantis Pharma. However, Wartsila Oyj Abp is 1.46 times less risky than Herantis Pharma. It trades about -0.03 of its potential returns per unit of risk. Herantis Pharma Oyj is currently generating about -0.04 per unit of risk. If you would invest 1,922 in Wartsila Oyj Abp on September 3, 2024 and sell it today you would lose (195.00) from holding Wartsila Oyj Abp or give up 10.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wartsila Oyj Abp vs. Herantis Pharma Oyj
Performance |
| Timeline |
| Wartsila Oyj Abp |
| Herantis Pharma Oyj |
Wartsila Oyj and Herantis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wartsila Oyj and Herantis Pharma
The main advantage of trading using opposite Wartsila Oyj and Herantis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wartsila Oyj position performs unexpectedly, Herantis Pharma 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 Herantis Pharma will offset losses from the drop in Herantis Pharma's long position.| Wartsila Oyj vs. Sampo Oyj A | Wartsila Oyj vs. Fortum Oyj | Wartsila Oyj vs. UPM Kymmene Oyj | Wartsila Oyj vs. Nordea Bank Abp |
| Herantis Pharma vs. Nanoform Finland Plc | Herantis Pharma vs. Nexstim Oyj | Herantis Pharma vs. Tokmanni Group Oyj | Herantis Pharma 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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