Correlation Between Hufvudstaden and Acrinova
Can any of the company-specific risk be diversified away by investing in both Hufvudstaden and Acrinova 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 Acrinova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hufvudstaden AB and Acrinova AB, you can compare the effects of market volatilities on Hufvudstaden and Acrinova 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 Acrinova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hufvudstaden and Acrinova.
Diversification Opportunities for Hufvudstaden and Acrinova
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hufvudstaden and Acrinova is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hufvudstaden AB and Acrinova AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrinova AB 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 Acrinova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrinova AB has no effect on the direction of Hufvudstaden i.e., Hufvudstaden and Acrinova go up and down completely randomly.
Pair Corralation between Hufvudstaden and Acrinova
Assuming the 90 days trading horizon Hufvudstaden AB is expected to under-perform the Acrinova. But the stock apears to be less risky and, when comparing its historical volatility, Hufvudstaden AB is 3.61 times less risky than Acrinova. The stock trades about -0.03 of its potential returns per unit of risk. The Acrinova AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 847.00 in Acrinova AB on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Acrinova AB or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hufvudstaden AB vs. Acrinova AB
Performance |
| Timeline |
| Hufvudstaden AB |
| Acrinova AB |
Hufvudstaden and Acrinova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hufvudstaden and Acrinova
The main advantage of trading using opposite Hufvudstaden and Acrinova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hufvudstaden position performs unexpectedly, Acrinova 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 Acrinova will offset losses from the drop in Acrinova's long position.| Hufvudstaden vs. Fabege AB | Hufvudstaden vs. Castellum AB | Hufvudstaden vs. Wallenstam AB | Hufvudstaden vs. Fastighets AB Balder |
| Acrinova vs. Acrinova AB Series | Acrinova vs. K2A Knaust Andersson | Acrinova vs. Eastnine AB | Acrinova vs. Fastator 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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