Correlation Between Hufvudstaden and Clinical Laserthermia
Can any of the company-specific risk be diversified away by investing in both Hufvudstaden and Clinical Laserthermia 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 Clinical Laserthermia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hufvudstaden AB and Clinical Laserthermia Systems, you can compare the effects of market volatilities on Hufvudstaden and Clinical Laserthermia 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 Clinical Laserthermia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hufvudstaden and Clinical Laserthermia.
Diversification Opportunities for Hufvudstaden and Clinical Laserthermia
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hufvudstaden and Clinical is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hufvudstaden AB and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia 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 Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Hufvudstaden i.e., Hufvudstaden and Clinical Laserthermia go up and down completely randomly.
Pair Corralation between Hufvudstaden and Clinical Laserthermia
Assuming the 90 days trading horizon Hufvudstaden AB is expected to generate 0.19 times more return on investment than Clinical Laserthermia. However, Hufvudstaden AB is 5.18 times less risky than Clinical Laserthermia. It trades about 0.01 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.2 per unit of risk. If you would invest 12,560 in Hufvudstaden AB on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Hufvudstaden AB or generate 0.08% 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. Clinical Laserthermia Systems
Performance |
| Timeline |
| Hufvudstaden AB |
| Clinical Laserthermia |
Hufvudstaden and Clinical Laserthermia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hufvudstaden and Clinical Laserthermia
The main advantage of trading using opposite Hufvudstaden and Clinical Laserthermia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hufvudstaden position performs unexpectedly, Clinical Laserthermia 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 Clinical Laserthermia will offset losses from the drop in Clinical Laserthermia's long position.| Hufvudstaden vs. Fabege AB | Hufvudstaden vs. Castellum AB | Hufvudstaden vs. Wallenstam AB | Hufvudstaden vs. Fastighets AB Balder |
| Clinical Laserthermia vs. Xvivo Perfusion AB | Clinical Laserthermia vs. BICO Group AB | Clinical Laserthermia vs. Bactiguard Holding AB | Clinical Laserthermia vs. Stille 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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