Correlation Between HusCompagniet and CBrain AS
Can any of the company-specific risk be diversified away by investing in both HusCompagniet and CBrain AS 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 CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HusCompagniet AS and cBrain AS, you can compare the effects of market volatilities on HusCompagniet and CBrain AS 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 CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and CBrain AS.
Diversification Opportunities for HusCompagniet and CBrain AS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between HusCompagniet and CBrain is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain 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 CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of HusCompagniet i.e., HusCompagniet and CBrain AS go up and down completely randomly.
Pair Corralation between HusCompagniet and CBrain AS
Assuming the 90 days trading horizon HusCompagniet AS is expected to generate 0.71 times more return on investment than CBrain AS. However, HusCompagniet AS is 1.41 times less risky than CBrain AS. It trades about 0.08 of its potential returns per unit of risk. cBrain AS is currently generating about -0.08 per unit of risk. If you would invest 4,365 in HusCompagniet AS on August 25, 2024 and sell it today you would earn a total of 1,315 from holding HusCompagniet AS or generate 30.13% 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. cBrain AS
Performance |
| Timeline |
| HusCompagniet AS |
| cBrain AS |
HusCompagniet and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HusCompagniet and CBrain AS
The main advantage of trading using opposite HusCompagniet and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, CBrain AS 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 CBrain AS will offset losses from the drop in CBrain AS's long position.| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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