Correlation Between Harvia Oyj and Heeros Oyj

Can any of the company-specific risk be diversified away by investing in both Harvia Oyj and Heeros 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 Heeros 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 Heeros Oyj, you can compare the effects of market volatilities on Harvia Oyj and Heeros 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 Heeros Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvia Oyj and Heeros Oyj.

Diversification Opportunities for Harvia Oyj and Heeros Oyj

0.36

Correlation Coefficient

Harvia Oyj  Heeros Oyj

Weak diversification

The 3 months correlation between Harvia and Heeros is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj and Heeros Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heeros 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 Heeros Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heeros Oyj has no effect on the direction of Harvia Oyj i.e., Harvia Oyj and Heeros Oyj go up and down completely randomly.

Pair Corralation between Harvia Oyj and Heeros Oyj

Assuming the 90 days trading horizon Harvia Oyj is expected to generate 2.66 times more return on investment than Heeros Oyj. However, Harvia Oyj is 2.66 times more volatile than Heeros Oyj. It trades about 0.04 of its potential returns per unit of risk. Heeros Oyj is currently generating about 0.06 per unit of risk. If you would invest  4,285  in Harvia Oyj on December 29, 2024 and sell it today you would earn a total of  160.00  from holding Harvia Oyj or generate 3.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Harvia Oyj  vs.  Heeros 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 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harvia Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Heeros Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Heeros Oyj are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Heeros Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harvia Oyj and Heeros Oyj

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

The idea behind Harvia Oyj and Heeros 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.