Correlation Between Vincit Group and Heeros Oyj

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

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

Diversification Opportunities for Vincit Group and Heeros Oyj

-0.33

Correlation Coefficient

Vincit Group  Heeros Oyj

Very good diversification

The 3 months correlation between Vincit and Heeros is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vincit Group Oyj and Heeros Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heeros Oyj and Vincit 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 Vincit Group 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 Vincit Group i.e., Vincit Group and Heeros Oyj go up and down completely randomly.

Pair Corralation between Vincit Group and Heeros Oyj

Assuming the 90 days trading horizon Vincit Group Oyj is expected to under-perform the Heeros Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Vincit Group Oyj is 7.08 times less risky than Heeros Oyj. The stock trades about -0.06 of its potential returns per unit of risk. The Heeros Oyj is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  368.00  in Heeros Oyj on September 4, 2024 and sell it today you would earn a total of  177.00  from holding Heeros Oyj or generate 48.1% return on investment over 90 days.

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

Vincit Group Oyj  vs.  Heeros Oyj

Vincit Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincit Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Heeros Oyj

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heeros Oyj are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Heeros Oyj sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vincit Group and Heeros Oyj

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

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.