Correlation Between Huddly AS and Polight ASA
Can any of the company-specific risk be diversified away by investing in both Huddly AS and Polight ASA 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 Huddly AS and Polight ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huddly AS and Polight ASA, you can compare the effects of market volatilities on Huddly AS and Polight ASA 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 Huddly AS with a short position of Polight ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huddly AS and Polight ASA.
Diversification Opportunities for Huddly AS and Polight ASA
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Huddly and Polight is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Huddly AS and Polight ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polight ASA and Huddly AS 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 Huddly AS are associated (or correlated) with Polight ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polight ASA has no effect on the direction of Huddly AS i.e., Huddly AS and Polight ASA go up and down completely randomly.
Pair Corralation between Huddly AS and Polight ASA
Assuming the 90 days trading horizon Huddly AS is expected to generate 3.16 times more return on investment than Polight ASA. However, Huddly AS is 3.16 times more volatile than Polight ASA. It trades about 0.23 of its potential returns per unit of risk. Polight ASA is currently generating about -0.37 per unit of risk. If you would invest 17.00 in Huddly AS on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Huddly AS or generate 41.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Huddly AS vs. Polight ASA
Performance |
| Timeline |
| Huddly AS |
| Polight ASA |
Huddly AS and Polight ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huddly AS and Polight ASA
The main advantage of trading using opposite Huddly AS and Polight ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huddly AS position performs unexpectedly, Polight ASA 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 Polight ASA will offset losses from the drop in Polight ASA's long position.| Huddly AS vs. Pexip Holding ASA | Huddly AS vs. Airthings ASA | Huddly AS vs. Aker Horizons AS | Huddly AS vs. Cambi ASA |
| Polight ASA vs. Elliptic Laboratories AS | Polight ASA vs. Kongsberg Automotive Holding | Polight ASA vs. REC Silicon ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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