Correlation Between Exel Composites and Harvia Oyj

Can any of the company-specific risk be diversified away by investing in both Exel Composites 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 Exel Composites and Harvia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exel Composites Oyj and Harvia Oyj, you can compare the effects of market volatilities on Exel Composites 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 Exel Composites with a short position of Harvia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Harvia Oyj.

Diversification Opportunities for Exel Composites and Harvia Oyj

0.61

Correlation Coefficient

Exel Composites  Harvia Oyj

Poor diversification

The 3 months correlation between Exel and Harvia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Harvia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvia Oyj and Exel Composites 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 Exel Composites 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 Exel Composites i.e., Exel Composites and Harvia Oyj go up and down completely randomly.

Pair Corralation between Exel Composites and Harvia Oyj

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Harvia Oyj. In addition to that, Exel Composites is 1.76 times more volatile than Harvia Oyj. It trades about -0.19 of its total potential returns per unit of risk. Harvia Oyj is currently generating about -0.08 per unit of volatility. If you would invest  4,670  in Harvia Oyj on September 28, 2024 and sell it today you would lose (385.00) from holding Harvia Oyj or give up 8.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Exel Composites Oyj  vs.  Harvia Oyj

Exel Composites Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exel Composites Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Harvia Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Exel Composites and Harvia Oyj

The main advantage of trading using opposite Exel Composites and Harvia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Composites 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.

The idea behind Exel Composites Oyj and Harvia Oyj 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.