Correlation Between HusCompagniet and Alm Brand
Can any of the company-specific risk be diversified away by investing in both HusCompagniet and Alm Brand 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 Alm Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HusCompagniet AS and Alm Brand, you can compare the effects of market volatilities on HusCompagniet and Alm Brand 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 Alm Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and Alm Brand.
Diversification Opportunities for HusCompagniet and Alm Brand
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HusCompagniet and Alm is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and Alm Brand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alm Brand 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 Alm Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alm Brand has no effect on the direction of HusCompagniet i.e., HusCompagniet and Alm Brand go up and down completely randomly.
Pair Corralation between HusCompagniet and Alm Brand
Assuming the 90 days trading horizon HusCompagniet is expected to generate 1.28 times less return on investment than Alm Brand. In addition to that, HusCompagniet is 1.47 times more volatile than Alm Brand. It trades about 0.03 of its total potential returns per unit of risk. Alm Brand is currently generating about 0.05 per unit of volatility. If you would invest 1,188 in Alm Brand on November 27, 2024 and sell it today you would earn a total of 370.00 from holding Alm Brand or generate 31.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HusCompagniet AS vs. Alm Brand
Performance |
| Timeline |
| HusCompagniet AS |
| Alm Brand |
HusCompagniet and Alm Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HusCompagniet and Alm Brand
The main advantage of trading using opposite HusCompagniet and Alm Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, Alm Brand 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 Alm Brand will offset losses from the drop in Alm Brand's long position.| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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