Correlation Between HusCompagniet and Alefarm Brewing
Can any of the company-specific risk be diversified away by investing in both HusCompagniet and Alefarm Brewing 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 HusCompagniet and Alefarm Brewing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HusCompagniet AS and Alefarm Brewing AS, you can compare the effects of market volatilities on HusCompagniet and Alefarm Brewing 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 HusCompagniet with a short position of Alefarm Brewing. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and Alefarm Brewing.
Diversification Opportunities for HusCompagniet and Alefarm Brewing
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between HusCompagniet and Alefarm is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and Alefarm Brewing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alefarm Brewing AS and HusCompagniet 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 HusCompagniet AS are associated (or correlated) with Alefarm Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alefarm Brewing AS has no effect on the direction of HusCompagniet i.e., HusCompagniet and Alefarm Brewing go up and down completely randomly.
Pair Corralation between HusCompagniet and Alefarm Brewing
Assuming the 90 days trading horizon HusCompagniet AS is expected to generate 0.45 times more return on investment than Alefarm Brewing. However, HusCompagniet AS is 2.25 times less risky than Alefarm Brewing. It trades about 0.03 of its potential returns per unit of risk. Alefarm Brewing AS is currently generating about 0.01 per unit of risk. If you would invest 4,885 in HusCompagniet AS on August 27, 2024 and sell it today you would earn a total of 795.00 from holding HusCompagniet AS or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HusCompagniet AS vs. Alefarm Brewing AS
Performance |
| Timeline |
| HusCompagniet AS |
| Alefarm Brewing AS |
HusCompagniet and Alefarm Brewing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HusCompagniet and Alefarm Brewing
The main advantage of trading using opposite HusCompagniet and Alefarm Brewing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, Alefarm Brewing 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 Alefarm Brewing will offset losses from the drop in Alefarm Brewing's long position.| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
| Alefarm Brewing vs. Sparinvest INDEX Globale | Alefarm Brewing vs. Bavarian Nordic | Alefarm Brewing vs. Investeringsselskabet Luxor AS | Alefarm Brewing vs. cBrain AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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