Correlation Between Harvia Oyj and Zignsec AB

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

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

Diversification Opportunities for Harvia Oyj and Zignsec AB

0.04

Correlation Coefficient

Harvia Oyj  Zignsec AB

Significant diversification

The 3 months correlation between Harvia and Zignsec is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Harvia Oyj and Zignsec AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zignsec AB 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 Zignsec AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zignsec AB has no effect on the direction of Harvia Oyj i.e., Harvia Oyj and Zignsec AB go up and down completely randomly.

Pair Corralation between Harvia Oyj and Zignsec AB

Assuming the 90 days trading horizon Harvia Oyj is expected to generate 1.81 times less return on investment than Zignsec AB. In addition to that, Harvia Oyj is 1.03 times more volatile than Zignsec AB. It trades about 0.05 of its total potential returns per unit of risk. Zignsec AB is currently generating about 0.1 per unit of volatility. If you would invest  121.00  in Zignsec AB on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Zignsec AB or generate 12.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Harvia Oyj  vs.  Zignsec AB

Harvia Oyj

Risk-Adjusted Performance

4 of 100

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 January 2025.

Zignsec AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zignsec AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zignsec AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvia Oyj and Zignsec AB

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

The idea behind Harvia Oyj and Zignsec AB 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.