Correlation Between Huber Capital and Axs Thomson

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

By analyzing existing cross correlation between Huber Capital Diversified and Axs Thomson Reuters, you can compare the effects of market volatilities on Huber Capital and Axs Thomson 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 Huber Capital with a short position of Axs Thomson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Axs Thomson.

Diversification Opportunities for Huber Capital and Axs Thomson

0.8

Correlation Coefficient

Huber Capital  Axs Thomson

Very poor diversification

The 3 months correlation between Huber and Axs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Axs Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axs Thomson Reuters and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with Axs Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axs Thomson Reuters has no effect on the direction of Huber Capital i.e., Huber Capital and Axs Thomson go up and down completely randomly.

Pair Corralation between Huber Capital and Axs Thomson

Assuming the 90 days horizon Huber Capital is expected to generate 2.07 times less return on investment than Axs Thomson. But when comparing it to its historical volatility, Huber Capital Diversified is 1.94 times less risky than Axs Thomson. It trades about 0.07 of its potential returns per unit of risk. Axs Thomson Reuters is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,441  in Axs Thomson Reuters on October 23, 2024 and sell it today you would earn a total of  1,132  from holding Axs Thomson Reuters or generate 78.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Huber Capital Diversified  vs.  Axs Thomson Reuters

Huber Capital Diversified

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Huber Capital Diversified are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Huber Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Axs Thomson Reuters

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axs Thomson Reuters are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Axs Thomson may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Huber Capital and Axs Thomson

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

The idea behind Huber Capital Diversified and Axs Thomson Reuters 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.