Correlation Between Citycon Oyj and Hufvudstaden
Can any of the company-specific risk be diversified away by investing in both Citycon Oyj and Hufvudstaden 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 Citycon Oyj and Hufvudstaden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citycon Oyj and Hufvudstaden AB, you can compare the effects of market volatilities on Citycon Oyj and Hufvudstaden 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 Citycon Oyj with a short position of Hufvudstaden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citycon Oyj and Hufvudstaden.
Diversification Opportunities for Citycon Oyj and Hufvudstaden
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citycon and Hufvudstaden is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citycon Oyj and Hufvudstaden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hufvudstaden AB and Citycon Oyj 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 Citycon Oyj are associated (or correlated) with Hufvudstaden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hufvudstaden AB has no effect on the direction of Citycon Oyj i.e., Citycon Oyj and Hufvudstaden go up and down completely randomly.
Pair Corralation between Citycon Oyj and Hufvudstaden
Assuming the 90 days trading horizon Citycon Oyj is expected to under-perform the Hufvudstaden. In addition to that, Citycon Oyj is 1.4 times more volatile than Hufvudstaden AB. It trades about -0.07 of its total potential returns per unit of risk. Hufvudstaden AB is currently generating about -0.05 per unit of volatility. If you would invest 1,084 in Hufvudstaden AB on September 1, 2024 and sell it today you would lose (19.00) from holding Hufvudstaden AB or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citycon Oyj vs. Hufvudstaden AB
Performance |
| Timeline |
| Citycon Oyj |
| Hufvudstaden AB |
Citycon Oyj and Hufvudstaden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citycon Oyj and Hufvudstaden
The main advantage of trading using opposite Citycon Oyj and Hufvudstaden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citycon Oyj position performs unexpectedly, Hufvudstaden 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 Hufvudstaden will offset losses from the drop in Hufvudstaden's long position.| Citycon Oyj vs. OPEN HOUSE GROUP | Citycon Oyj vs. Superior Plus Corp | Citycon Oyj vs. NMI Holdings | Citycon Oyj vs. Origin Agritech |
| Hufvudstaden vs. Vulcan Materials | Hufvudstaden vs. VULCAN MATERIALS | Hufvudstaden vs. Evolution Mining Limited | Hufvudstaden vs. Martin Marietta Materials |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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