Correlation Between Humble Group and Sleep Cycle
Can any of the company-specific risk be diversified away by investing in both Humble Group and Sleep Cycle 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 Sleep Cycle 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 Sleep Cycle AB, you can compare the effects of market volatilities on Humble Group and Sleep Cycle 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 Sleep Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Sleep Cycle.
Diversification Opportunities for Humble Group and Sleep Cycle
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Humble and Sleep is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and Sleep Cycle AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleep Cycle 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 Sleep Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleep Cycle AB has no effect on the direction of Humble Group i.e., Humble Group and Sleep Cycle go up and down completely randomly.
Pair Corralation between Humble Group and Sleep Cycle
Assuming the 90 days trading horizon Humble Group AB is expected to generate 2.1 times more return on investment than Sleep Cycle. However, Humble Group is 2.1 times more volatile than Sleep Cycle AB. It trades about 0.28 of its potential returns per unit of risk. Sleep Cycle AB is currently generating about -0.48 per unit of risk. If you would invest 1,038 in Humble Group AB on September 24, 2024 and sell it today you would earn a total of 192.00 from holding Humble Group AB or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humble Group AB vs. Sleep Cycle AB
Performance |
| Timeline |
| Humble Group AB |
| Sleep Cycle AB |
Humble Group and Sleep Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humble Group and Sleep Cycle
The main advantage of trading using opposite Humble Group and Sleep Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble Group position performs unexpectedly, Sleep Cycle 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 Sleep Cycle will offset losses from the drop in Sleep Cycle's 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 |
| Sleep Cycle vs. Humble Group AB | Sleep Cycle vs. Enad Global 7 | Sleep Cycle vs. Goodbye Kansas Group | Sleep Cycle vs. Mekonomen 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |