Correlation Between Sitowise Group and Harvia Oyj

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

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

Diversification Opportunities for Sitowise Group and Harvia Oyj

0.19

Correlation Coefficient

Sitowise Group  Harvia Oyj

Average diversification

The 3 months correlation between Sitowise and Harvia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sitowise Group Oyj and Harvia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvia Oyj and Sitowise Group 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 Sitowise Group Oyj 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 Sitowise Group i.e., Sitowise Group and Harvia Oyj go up and down completely randomly.

Pair Corralation between Sitowise Group and Harvia Oyj

Assuming the 90 days trading horizon Sitowise Group Oyj is expected to under-perform the Harvia Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Sitowise Group Oyj is 1.03 times less risky than Harvia Oyj. The stock trades about -0.03 of its potential returns per unit of risk. The Harvia Oyj is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,832  in Harvia Oyj on September 28, 2024 and sell it today you would earn a total of  2,453  from holding Harvia Oyj or generate 133.9% return on investment over 90 days.

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

Sitowise Group Oyj  vs.  Harvia Oyj

Sitowise Group Oyj

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sitowise Group Oyj are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Sitowise Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harvia Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sitowise Group and Harvia Oyj

The main advantage of trading using opposite Sitowise Group and Harvia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitowise Group 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 Sitowise Group Oyj 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.