Correlation Between Hufvudstaden and Citycon Oyj
Can any of the company-specific risk be diversified away by investing in both Hufvudstaden and Citycon Oyj 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 Hufvudstaden and Citycon Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hufvudstaden AB and Citycon Oyj, you can compare the effects of market volatilities on Hufvudstaden and Citycon Oyj 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 Hufvudstaden with a short position of Citycon Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hufvudstaden and Citycon Oyj.
Diversification Opportunities for Hufvudstaden and Citycon Oyj
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hufvudstaden and Citycon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hufvudstaden AB and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj and Hufvudstaden 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 Hufvudstaden AB are associated (or correlated) with Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of Hufvudstaden i.e., Hufvudstaden and Citycon Oyj go up and down completely randomly.
Pair Corralation between Hufvudstaden and Citycon Oyj
Assuming the 90 days trading horizon Hufvudstaden AB is expected to generate 0.72 times more return on investment than Citycon Oyj. However, Hufvudstaden AB is 1.4 times less risky than Citycon Oyj. It trades about -0.05 of its potential returns per unit of risk. Citycon Oyj is currently generating about -0.07 per unit of risk. If you would invest 1,084 in Hufvudstaden AB on September 1, 2024 and sell it today you would lose (19.00) from holding Hufvudstaden AB or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hufvudstaden AB vs. Citycon Oyj
Performance |
| Timeline |
| Hufvudstaden AB |
| Citycon Oyj |
Hufvudstaden and Citycon Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hufvudstaden and Citycon Oyj
The main advantage of trading using opposite Hufvudstaden and Citycon Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hufvudstaden position performs unexpectedly, Citycon Oyj 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 Citycon Oyj will offset losses from the drop in Citycon Oyj's long position.| Hufvudstaden vs. Vulcan Materials | Hufvudstaden vs. VULCAN MATERIALS | Hufvudstaden vs. Evolution Mining Limited | Hufvudstaden vs. Martin Marietta Materials |
| Citycon Oyj vs. OPEN HOUSE GROUP | Citycon Oyj vs. Superior Plus Corp | Citycon Oyj vs. NMI Holdings | Citycon Oyj vs. Origin Agritech |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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