Correlation Between Cloetta AB and Humana AB
Can any of the company-specific risk be diversified away by investing in both Cloetta AB 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 Cloetta AB and Humana AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloetta AB and Humana AB, you can compare the effects of market volatilities on Cloetta AB 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 Cloetta AB with a short position of Humana AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloetta AB and Humana AB.
Diversification Opportunities for Cloetta AB and Humana AB
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cloetta and Humana is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cloetta AB and Humana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana AB and Cloetta 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 Cloetta 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 Cloetta AB i.e., Cloetta AB and Humana AB go up and down completely randomly.
Pair Corralation between Cloetta AB and Humana AB
Assuming the 90 days trading horizon Cloetta AB is expected to generate 0.79 times more return on investment than Humana AB. However, Cloetta AB is 1.26 times less risky than Humana AB. It trades about 0.08 of its potential returns per unit of risk. Humana AB is currently generating about 0.03 per unit of risk. If you would invest 2,446 in Cloetta AB on August 29, 2024 and sell it today you would earn a total of 126.00 from holding Cloetta AB or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloetta AB vs. Humana AB
Performance |
| Timeline |
| Cloetta AB |
| Humana AB |
Cloetta AB and Humana AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloetta AB and Humana AB
The main advantage of trading using opposite Cloetta AB and Humana AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloetta AB 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.| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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