Correlation Between Actic Group and Humana AB
Can any of the company-specific risk be diversified away by investing in both Actic Group 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 Actic Group and Humana AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Actic Group AB and Humana AB, you can compare the effects of market volatilities on Actic Group 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 Actic Group with a short position of Humana AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Actic Group and Humana AB.
Diversification Opportunities for Actic Group and Humana AB
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Actic and Humana is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Actic Group AB and Humana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana AB and Actic 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 Actic Group AB 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 Actic Group i.e., Actic Group and Humana AB go up and down completely randomly.
Pair Corralation between Actic Group and Humana AB
Assuming the 90 days trading horizon Actic Group AB is expected to generate 2.55 times more return on investment than Humana AB. However, Actic Group is 2.55 times more volatile than Humana AB. It trades about 0.07 of its potential returns per unit of risk. Humana AB is currently generating about 0.06 per unit of risk. If you would invest 452.00 in Actic Group AB on August 29, 2024 and sell it today you would earn a total of 158.00 from holding Actic Group AB or generate 34.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Actic Group AB vs. Humana AB
Performance |
| Timeline |
| Actic Group AB |
| Humana AB |
Actic Group and Humana AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Actic Group and Humana AB
The main advantage of trading using opposite Actic Group and Humana AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actic Group 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.| Actic Group vs. Bjorn Borg AB | Actic Group vs. Starbreeze AB | Actic Group vs. Bong AB | Actic Group vs. Alimak Hek Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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