Correlation Between Hurum and Humax
Can any of the company-specific risk be diversified away by investing in both Hurum and Humax 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 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 Co, you can compare the effects of market volatilities on Hurum and Humax 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Humax.
Diversification Opportunities for Hurum and Humax
Almost no diversification
The 3 months correlation between Hurum and Humax is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of Hurum i.e., Hurum and Humax go up and down completely randomly.
Pair Corralation between Hurum and Humax
Assuming the 90 days trading horizon Hurum is expected to generate 2.11 times less return on investment than Humax. But when comparing it to its historical volatility, Hurum Co is 2.29 times less risky than Humax. It trades about 0.36 of its potential returns per unit of risk. Humax Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 99,000 in Humax Co on October 9, 2024 and sell it today you would earn a total of 30,500 from holding Humax Co or generate 30.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Humax Co
Performance |
| Timeline |
| Hurum |
| Humax |
Hurum and Humax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Humax
The main advantage of trading using opposite Hurum and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Humax 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 will offset losses from the drop in Humax's long position.| Hurum vs. DSC Investment | Hurum vs. SV Investment | Hurum vs. Worldex Industry Trading | Hurum vs. NH Investment Securities |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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