Correlation Between Harvia Oyj and Admicom Oyj

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

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

Diversification Opportunities for Harvia Oyj and Admicom Oyj

0.88

Correlation Coefficient

Harvia Oyj  Admicom Oyj

Very poor diversification

The 3 months correlation between Harvia and Admicom is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj and Admicom Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admicom Oyj and Harvia 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 Harvia Oyj are associated (or correlated) with Admicom Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admicom Oyj has no effect on the direction of Harvia Oyj i.e., Harvia Oyj and Admicom Oyj go up and down completely randomly.

Pair Corralation between Harvia Oyj and Admicom Oyj

Assuming the 90 days trading horizon Harvia Oyj is expected to generate 1.93 times less return on investment than Admicom Oyj. But when comparing it to its historical volatility, Harvia Oyj is 1.1 times less risky than Admicom Oyj. It trades about 0.06 of its potential returns per unit of risk. Admicom Oyj is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,805  in Admicom Oyj on November 29, 2024 and sell it today you would earn a total of  605.00  from holding Admicom Oyj or generate 12.59% return on investment over 90 days.

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

Harvia Oyj  vs.  Admicom Oyj

Harvia Oyj

Risk-Adjusted Performance

Insignificant

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

Admicom Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Admicom Oyj are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Admicom Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvia Oyj and Admicom Oyj

The main advantage of trading using opposite Harvia Oyj and Admicom Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvia Oyj position performs unexpectedly, Admicom 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 Admicom Oyj will offset losses from the drop in Admicom Oyj's long position.

The idea behind Harvia Oyj and Admicom 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.