Correlation Between Hurum and Humax Holdings
Can any of the company-specific risk be diversified away by investing in both Hurum and Humax Holdings 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 Hurum and Humax Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Humax Holdings Co, you can compare the effects of market volatilities on Hurum and Humax Holdings 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 Hurum with a short position of Humax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Humax Holdings.
Diversification Opportunities for Hurum and Humax Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurum and Humax is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Humax Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax Holdings and Hurum 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 Hurum Co are associated (or correlated) with Humax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax Holdings has no effect on the direction of Hurum i.e., Hurum and Humax Holdings go up and down completely randomly.
Pair Corralation between Hurum and Humax Holdings
Assuming the 90 days trading horizon Hurum is expected to generate 5.23 times less return on investment than Humax Holdings. But when comparing it to its historical volatility, Hurum Co is 5.85 times less risky than Humax Holdings. It trades about 0.27 of its potential returns per unit of risk. Humax Holdings Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 258,000 in Humax Holdings Co on October 24, 2024 and sell it today you would earn a total of 103,500 from holding Humax Holdings Co or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Humax Holdings Co
Performance |
| Timeline |
| Hurum |
| Humax Holdings |
Hurum and Humax Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Humax Holdings
The main advantage of trading using opposite Hurum and Humax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Humax Holdings 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 Humax Holdings will offset losses from the drop in Humax Holdings' long position.| Hurum vs. Tamul Multimedia Co | Hurum vs. Hanwha Life Insurance | Hurum vs. Daewon Media Co | Hurum vs. DC Media Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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