Correlation Between Humble Group and Sinch AB
Can any of the company-specific risk be diversified away by investing in both Humble Group and Sinch AB 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 Sinch AB 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 Sinch AB, you can compare the effects of market volatilities on Humble Group and Sinch AB 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 Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Sinch AB.
Diversification Opportunities for Humble Group and Sinch AB
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Humble and Sinch is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB 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 Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Humble Group i.e., Humble Group and Sinch AB go up and down completely randomly.
Pair Corralation between Humble Group and Sinch AB
Assuming the 90 days trading horizon Humble Group AB is expected to generate 0.7 times more return on investment than Sinch AB. However, Humble Group AB is 1.44 times less risky than Sinch AB. It trades about 0.02 of its potential returns per unit of risk. Sinch AB is currently generating about -0.02 per unit of risk. If you would invest 1,120 in Humble Group AB on October 9, 2024 and sell it today you would earn a total of 169.00 from holding Humble Group AB or generate 15.09% 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. Sinch AB
Performance |
| Timeline |
| Humble Group AB |
| Sinch AB |
Humble Group and Sinch AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humble Group and Sinch AB
The main advantage of trading using opposite Humble Group and Sinch AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble Group position performs unexpectedly, Sinch AB 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 Sinch AB will offset losses from the drop in Sinch AB's long position.| Humble Group vs. Know IT AB | Humble Group vs. Cloetta AB | Humble Group vs. BioGaia AB | Humble Group vs. Byggmax Group AB |
| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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