Correlation Between Harvia Oyj and Qt Group

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

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

Diversification Opportunities for Harvia Oyj and Qt Group

0.64

Correlation Coefficient

Harvia Oyj  Qt Group

Poor diversification

The 3 months correlation between Harvia and QTCOM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group 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 Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Harvia Oyj i.e., Harvia Oyj and Qt Group go up and down completely randomly.

Pair Corralation between Harvia Oyj and Qt Group

Assuming the 90 days trading horizon Harvia Oyj is expected to generate 6.4 times less return on investment than Qt Group. But when comparing it to its historical volatility, Harvia Oyj is 1.43 times less risky than Qt Group. It trades about 0.04 of its potential returns per unit of risk. Qt Group Oyj is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7,710  in Qt Group Oyj on November 29, 2024 and sell it today you would earn a total of  1,040  from holding Qt Group Oyj or generate 13.49% return on investment over 90 days.

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

Harvia Oyj  vs.  Qt Group 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.

Qt Group Oyj

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qt Group Oyj are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Qt Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvia Oyj and Qt Group

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

The idea behind Harvia Oyj and Qt Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.