Correlation Between HusCompagniet and North Media
Can any of the company-specific risk be diversified away by investing in both HusCompagniet and North Media 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 North Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HusCompagniet AS and North Media AS, you can compare the effects of market volatilities on HusCompagniet and North Media 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 North Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and North Media.
Diversification Opportunities for HusCompagniet and North Media
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HusCompagniet and North is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and North Media AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Media 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 North Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Media AS has no effect on the direction of HusCompagniet i.e., HusCompagniet and North Media go up and down completely randomly.
Pair Corralation between HusCompagniet and North Media
Assuming the 90 days trading horizon HusCompagniet AS is expected to generate 1.31 times more return on investment than North Media. However, HusCompagniet is 1.31 times more volatile than North Media AS. It trades about 0.03 of its potential returns per unit of risk. North Media AS is currently generating about -0.01 per unit of risk. If you would invest 4,580 in HusCompagniet AS on August 25, 2024 and sell it today you would earn a total of 1,100 from holding HusCompagniet AS or generate 24.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HusCompagniet AS vs. North Media AS
Performance |
| Timeline |
| HusCompagniet AS |
| North Media AS |
HusCompagniet and North Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HusCompagniet and North Media
The main advantage of trading using opposite HusCompagniet and North Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, North Media 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 North Media will offset losses from the drop in North Media's long position.| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
| North Media vs. Matas AS | North Media vs. cBrain AS | North Media vs. Alm Brand | North Media vs. Netcompany Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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