Correlation Between HusCompagniet and MapsPeople
Can any of the company-specific risk be diversified away by investing in both HusCompagniet and MapsPeople 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 MapsPeople into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HusCompagniet AS and MapsPeople AS, you can compare the effects of market volatilities on HusCompagniet and MapsPeople 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 MapsPeople. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and MapsPeople.
Diversification Opportunities for HusCompagniet and MapsPeople
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HusCompagniet and MapsPeople is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and MapsPeople AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MapsPeople 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 MapsPeople. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MapsPeople AS has no effect on the direction of HusCompagniet i.e., HusCompagniet and MapsPeople go up and down completely randomly.
Pair Corralation between HusCompagniet and MapsPeople
Assuming the 90 days trading horizon HusCompagniet AS is expected to generate 0.25 times more return on investment than MapsPeople. However, HusCompagniet AS is 3.98 times less risky than MapsPeople. It trades about -0.08 of its potential returns per unit of risk. MapsPeople AS is currently generating about -0.04 per unit of risk. If you would invest 6,500 in HusCompagniet AS on August 29, 2024 and sell it today you would lose (680.00) from holding HusCompagniet AS or give up 10.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HusCompagniet AS vs. MapsPeople AS
Performance |
| Timeline |
| HusCompagniet AS |
| MapsPeople AS |
HusCompagniet and MapsPeople Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HusCompagniet and MapsPeople
The main advantage of trading using opposite HusCompagniet and MapsPeople positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, MapsPeople 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 MapsPeople will offset losses from the drop in MapsPeople's long position.| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
| MapsPeople vs. Penneo AS | MapsPeople vs. Orderyoyo AS | MapsPeople vs. FOM Technologies AS | MapsPeople vs. Shape Robotics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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