Correlation Between AAC Clyde and Humble Group
Can any of the company-specific risk be diversified away by investing in both AAC Clyde and Humble Group 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 AAC Clyde and Humble Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC Clyde Space and Humble Group AB, you can compare the effects of market volatilities on AAC Clyde and Humble Group 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 AAC Clyde with a short position of Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC Clyde and Humble Group.
Diversification Opportunities for AAC Clyde and Humble Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAC and Humble is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AAC Clyde Space and Humble Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humble Group AB and AAC Clyde 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 AAC Clyde Space are associated (or correlated) with Humble Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humble Group AB has no effect on the direction of AAC Clyde i.e., AAC Clyde and Humble Group go up and down completely randomly.
Pair Corralation between AAC Clyde and Humble Group
Assuming the 90 days trading horizon AAC Clyde is expected to generate 1.61 times less return on investment than Humble Group. In addition to that, AAC Clyde is 1.26 times more volatile than Humble Group AB. It trades about 0.03 of its total potential returns per unit of risk. Humble Group AB is currently generating about 0.07 per unit of volatility. If you would invest 978.00 in Humble Group AB on October 13, 2024 and sell it today you would earn a total of 223.00 from holding Humble Group AB or generate 22.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC Clyde Space vs. Humble Group AB
Performance |
| Timeline |
| AAC Clyde Space |
| Humble Group AB |
AAC Clyde and Humble Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC Clyde and Humble Group
The main advantage of trading using opposite AAC Clyde and Humble Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC Clyde position performs unexpectedly, Humble Group 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 Humble Group will offset losses from the drop in Humble Group's long position.| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
| Humble Group vs. Samhllsbyggnadsbolaget i Norden | Humble Group vs. Media and Games | Humble Group vs. Hexatronic Group AB | Humble Group vs. Sinch AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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