Correlation Between Smart Eye and Harvia Oyj

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

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

Diversification Opportunities for Smart Eye and Harvia Oyj

-0.7

Correlation Coefficient

Smart Eye  Harvia Oyj

Excellent diversification

The 3 months correlation between Smart and Harvia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Smart Eye AB and Harvia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvia Oyj and Smart Eye 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 Smart Eye AB 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 Smart Eye i.e., Smart Eye and Harvia Oyj go up and down completely randomly.

Pair Corralation between Smart Eye and Harvia Oyj

Assuming the 90 days trading horizon Smart Eye AB is expected to under-perform the Harvia Oyj. In addition to that, Smart Eye is 2.25 times more volatile than Harvia Oyj. It trades about -0.07 of its total potential returns per unit of risk. Harvia Oyj is currently generating about 0.04 per unit of volatility. If you would invest  4,285  in Harvia Oyj on December 30, 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Smart Eye AB  vs.  Harvia Oyj

Smart Eye AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smart Eye AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Smart Eye and Harvia Oyj

The main advantage of trading using opposite Smart Eye and Harvia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Eye 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 Smart Eye AB 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 CEOs Directory module to screen CEOs from public companies around the world.