Correlation Between Byggmax Group and Humana AB
Can any of the company-specific risk be diversified away by investing in both Byggmax 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 Byggmax 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 Byggmax Group AB and Humana AB, you can compare the effects of market volatilities on Byggmax 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 Byggmax Group with a short position of Humana AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Byggmax Group and Humana AB.
Diversification Opportunities for Byggmax Group and Humana AB
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Byggmax and Humana is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax 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 Byggmax 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 Byggmax 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 Byggmax Group i.e., Byggmax Group and Humana AB go up and down completely randomly.
Pair Corralation between Byggmax Group and Humana AB
Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 1.15 times more return on investment than Humana AB. However, Byggmax Group is 1.15 times more volatile than Humana AB. It trades about -0.08 of its potential returns per unit of risk. Humana AB is currently generating about -0.12 per unit of risk. If you would invest 4,570 in Byggmax Group AB on August 30, 2024 and sell it today you would lose (250.00) from holding Byggmax Group AB or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Byggmax Group AB vs. Humana AB
Performance |
| Timeline |
| Byggmax Group AB |
| Humana AB |
Byggmax Group and Humana AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Byggmax Group and Humana AB
The main advantage of trading using opposite Byggmax Group and Humana AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax 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.| Byggmax Group vs. Thule Group AB | Byggmax Group vs. Sinch AB | Byggmax Group vs. Hexatronic Group AB | Byggmax Group vs. NIBE Industrier 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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