Correlation Between Careium AB and Humble Group
Can any of the company-specific risk be diversified away by investing in both Careium AB 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 Careium AB and Humble Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Careium AB and Humble Group AB, you can compare the effects of market volatilities on Careium AB 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 Careium AB with a short position of Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Careium AB and Humble Group.
Diversification Opportunities for Careium AB and Humble Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Careium and Humble is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Careium AB 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 Careium AB 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 Careium AB 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 Careium AB i.e., Careium AB and Humble Group go up and down completely randomly.
Pair Corralation between Careium AB and Humble Group
Assuming the 90 days trading horizon Careium AB is expected to generate 1.08 times more return on investment than Humble Group. However, Careium AB is 1.08 times more volatile than Humble Group AB. It trades about 0.04 of its potential returns per unit of risk. Humble Group AB is currently generating about 0.03 per unit of risk. If you would invest 2,460 in Careium AB on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Careium AB or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Careium AB vs. Humble Group AB
Performance |
| Timeline |
| Careium AB |
| Humble Group AB |
Careium AB and Humble Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Careium AB and Humble Group
The main advantage of trading using opposite Careium AB and Humble Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Careium AB 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.| Careium AB vs. Humble Group AB | Careium AB vs. Enad Global 7 | Careium AB vs. Goodbye Kansas Group | Careium AB vs. KABE Group AB |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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