Correlation Between Cloetta AB and Humble Group
Can any of the company-specific risk be diversified away by investing in both Cloetta 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 Cloetta 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 Cloetta AB and Humble Group AB, you can compare the effects of market volatilities on Cloetta 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 Cloetta AB with a short position of Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloetta AB and Humble Group.
Diversification Opportunities for Cloetta AB and Humble Group
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cloetta and Humble is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cloetta 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 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 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 Cloetta AB i.e., Cloetta AB and Humble Group go up and down completely randomly.
Pair Corralation between Cloetta AB and Humble Group
Assuming the 90 days trading horizon Cloetta AB is expected to generate 1.4 times less return on investment than Humble Group. But when comparing it to its historical volatility, Cloetta AB is 2.28 times less risky than Humble Group. It trades about 0.04 of its potential returns per unit of risk. Humble Group AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,002 in Humble Group AB on October 25, 2024 and sell it today you would earn a total of 175.00 from holding Humble Group AB or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cloetta AB vs. Humble Group AB
Performance |
| Timeline |
| Cloetta AB |
| Humble Group AB |
Cloetta AB and Humble Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloetta AB and Humble Group
The main advantage of trading using opposite Cloetta AB and Humble Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloetta 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.| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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