Correlation Between Humble Group and Checkin Group
Can any of the company-specific risk be diversified away by investing in both Humble Group and Checkin 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 Humble Group and Checkin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humble Group AB and Checkin Group AB, you can compare the effects of market volatilities on Humble Group and Checkin 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 Humble Group with a short position of Checkin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Checkin Group.
Diversification Opportunities for Humble Group and Checkin Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Humble and Checkin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and Checkin Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Checkin Group AB and Humble 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 Humble Group AB are associated (or correlated) with Checkin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Checkin Group AB has no effect on the direction of Humble Group i.e., Humble Group and Checkin Group go up and down completely randomly.
Pair Corralation between Humble Group and Checkin Group
Assuming the 90 days trading horizon Humble Group AB is expected to generate 0.83 times more return on investment than Checkin Group. However, Humble Group AB is 1.2 times less risky than Checkin Group. It trades about 0.26 of its potential returns per unit of risk. Checkin Group AB is currently generating about -0.28 per unit of risk. If you would invest 1,038 in Humble Group AB on September 26, 2024 and sell it today you would earn a total of 179.00 from holding Humble Group AB or generate 17.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Humble Group AB vs. Checkin Group AB
Performance |
Timeline |
Humble Group AB |
Checkin Group AB |
Humble Group and Checkin Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Humble Group and Checkin Group
The main advantage of trading using opposite Humble Group and Checkin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble Group position performs unexpectedly, Checkin 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 Checkin Group will offset losses from the drop in Checkin Group's long position.Humble Group vs. Samhllsbyggnadsbolaget i Norden | Humble Group vs. Media and Games | Humble Group vs. Hexatronic Group AB | Humble Group vs. Sinch AB |
Checkin Group vs. Bambuser AB | Checkin Group vs. Cint Group AB | Checkin Group vs. Sinch AB | Checkin Group vs. Surgical Science Sweden |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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