Correlation Between SP Group and HH International
Can any of the company-specific risk be diversified away by investing in both SP Group and HH International 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 SP Group and HH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Group AS and HH International AS, you can compare the effects of market volatilities on SP Group and HH International 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 SP Group with a short position of HH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Group and HH International.
Diversification Opportunities for SP Group and HH International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPG and HH International is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SP Group AS and HH International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HH International and SP Group 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 SP Group AS are associated (or correlated) with HH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HH International has no effect on the direction of SP Group i.e., SP Group and HH International go up and down completely randomly.
Pair Corralation between SP Group and HH International
Assuming the 90 days trading horizon SP Group AS is expected to generate 0.96 times more return on investment than HH International. However, SP Group AS is 1.05 times less risky than HH International. It trades about 0.03 of its potential returns per unit of risk. HH International AS is currently generating about -0.14 per unit of risk. If you would invest 30,250 in SP Group AS on November 5, 2024 and sell it today you would earn a total of 250.00 from holding SP Group AS or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SP Group AS vs. HH International AS
Performance |
| Timeline |
| SP Group AS |
| HH International |
SP Group and HH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Group and HH International
The main advantage of trading using opposite SP Group and HH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Group position performs unexpectedly, HH International 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 HH International will offset losses from the drop in HH International's long position.| SP Group vs. Schouw Co | SP Group vs. Per Aarsleff Holding | SP Group vs. HH International AS | SP Group vs. DFDS AS |
| HH International vs. ROCKWOOL International AS | HH International vs. Per Aarsleff Holding | HH International vs. Matas AS | HH International vs. DFDS 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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