Correlation Between Humble Group and IAR Systems
Can any of the company-specific risk be diversified away by investing in both Humble Group and IAR Systems 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 Humble Group and IAR Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humble Group AB and IAR Systems Group, you can compare the effects of market volatilities on Humble Group and IAR Systems 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 Humble Group with a short position of IAR Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and IAR Systems.
Diversification Opportunities for Humble Group and IAR Systems
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humble and IAR is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and IAR Systems Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAR Systems Group and Humble Group 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 Humble Group AB are associated (or correlated) with IAR Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAR Systems Group has no effect on the direction of Humble Group i.e., Humble Group and IAR Systems go up and down completely randomly.
Pair Corralation between Humble Group and IAR Systems
Assuming the 90 days trading horizon Humble Group AB is expected to generate 1.12 times more return on investment than IAR Systems. However, Humble Group is 1.12 times more volatile than IAR Systems Group. It trades about 0.03 of its potential returns per unit of risk. IAR Systems Group is currently generating about -0.01 per unit of risk. If you would invest 1,050 in Humble Group AB on October 7, 2024 and sell it today you would earn a total of 239.00 from holding Humble Group AB or generate 22.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humble Group AB vs. IAR Systems Group
Performance |
| Timeline |
| Humble Group AB |
| IAR Systems Group |
Humble Group and IAR Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humble Group and IAR Systems
The main advantage of trading using opposite Humble Group and IAR Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble Group position performs unexpectedly, IAR Systems 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 IAR Systems will offset losses from the drop in IAR Systems' long position.| Humble Group vs. Samhllsbyggnadsbolaget i Norden | Humble Group vs. Media and Games | Humble Group vs. Hexatronic Group AB | Humble Group vs. Sinch AB |
| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |