Correlation Between Essity AB and Husqvarna
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By analyzing existing cross correlation between Essity AB and Husqvarna AB, you can compare the effects of market volatilities on Essity AB and Husqvarna 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 Essity AB with a short position of Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essity AB and Husqvarna.
Diversification Opportunities for Essity AB and Husqvarna
Good diversification
The 3 months correlation between Essity and Husqvarna is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Essity AB and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna AB and Essity 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 Essity AB are associated (or correlated) with Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of Essity AB i.e., Essity AB and Husqvarna go up and down completely randomly.
Pair Corralation between Essity AB and Husqvarna
Assuming the 90 days trading horizon Essity AB is expected to generate 0.5 times more return on investment than Husqvarna. However, Essity AB is 1.98 times less risky than Husqvarna. It trades about 0.08 of its potential returns per unit of risk. Husqvarna AB is currently generating about -0.1 per unit of risk. If you would invest 27,480 in Essity AB on August 30, 2024 and sell it today you would earn a total of 2,920 from holding Essity AB or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essity AB vs. Husqvarna AB
Performance |
| Timeline |
| Essity AB |
| Husqvarna AB |
Essity AB and Husqvarna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essity AB and Husqvarna
The main advantage of trading using opposite Essity AB and Husqvarna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essity AB position performs unexpectedly, Husqvarna 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 Husqvarna will offset losses from the drop in Husqvarna's long position.| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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