Correlation Between Effnetplattformen and Humble Group

Can any of the company-specific risk be diversified away by investing in both Effnetplattformen and Humble Group 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 Effnetplattformen and Humble Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Effnetplattformen Holding AB and Humble Group AB, you can compare the effects of market volatilities on Effnetplattformen and Humble Group 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 Effnetplattformen with a short position of Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Effnetplattformen and Humble Group.

Diversification Opportunities for Effnetplattformen and Humble Group

0.57

Correlation Coefficient

Effnetplattformen  Humble Group

Very weak diversification

The 3 months correlation between Effnetplattformen and Humble is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Effnetplattformen Holding AB and Humble Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humble Group AB and Effnetplattformen 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 Effnetplattformen Holding AB are associated (or correlated) with Humble Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humble Group AB has no effect on the direction of Effnetplattformen i.e., Effnetplattformen and Humble Group go up and down completely randomly.

Pair Corralation between Effnetplattformen and Humble Group

Assuming the 90 days trading horizon Effnetplattformen Holding AB is expected to generate 0.97 times more return on investment than Humble Group. However, Effnetplattformen Holding AB is 1.03 times less risky than Humble Group. It trades about 0.07 of its potential returns per unit of risk. Humble Group AB is currently generating about -0.12 per unit of risk. If you would invest  290.00  in Effnetplattformen Holding AB on December 11, 2024 and sell it today you would earn a total of  8.00  from holding Effnetplattformen Holding AB or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Effnetplattformen Holding AB  vs.  Humble Group AB

Effnetplattformen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Effnetplattformen Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Humble Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Humble Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Effnetplattformen and Humble Group

The main advantage of trading using opposite Effnetplattformen and Humble Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Effnetplattformen position performs unexpectedly, Humble Group 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 Humble Group will offset losses from the drop in Humble Group's long position.

The idea behind Effnetplattformen Holding AB and Humble Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.