Correlation Between Alimak Hek and Humana AB
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Humana AB 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 Alimak Hek and Humana AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimak Hek Group and Humana AB, you can compare the effects of market volatilities on Alimak Hek and Humana AB 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 Alimak Hek with a short position of Humana AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Humana AB.
Diversification Opportunities for Alimak Hek and Humana AB
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alimak and Humana is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Humana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana AB and Alimak Hek 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 Alimak Hek Group are associated (or correlated) with Humana AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Humana AB go up and down completely randomly.
Pair Corralation between Alimak Hek and Humana AB
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 0.61 times more return on investment than Humana AB. However, Alimak Hek Group is 1.65 times less risky than Humana AB. It trades about 0.05 of its potential returns per unit of risk. Humana AB is currently generating about -0.11 per unit of risk. If you would invest 11,680 in Alimak Hek Group on August 29, 2024 and sell it today you would earn a total of 160.00 from holding Alimak Hek Group or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Humana AB
Performance |
| Timeline |
| Alimak Hek Group |
| Humana AB |
Alimak Hek and Humana AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Humana AB
The main advantage of trading using opposite Alimak Hek and Humana AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Humana AB 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 Humana AB will offset losses from the drop in Humana AB's long position.| Alimak Hek vs. Inwido AB | Alimak Hek vs. Bufab Holding AB | Alimak Hek vs. Cloetta AB | Alimak Hek vs. Dometic Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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