Correlation Between Humble Group and Coala Life

Can any of the company-specific risk be diversified away by investing in both Humble Group and Coala Life 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 Coala Life 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 Coala Life Group, you can compare the effects of market volatilities on Humble Group and Coala Life 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 Coala Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Coala Life.

Diversification Opportunities for Humble Group and Coala Life

0.0

Correlation Coefficient

Humble Group  Coala Life

Pay attention - limited upside

The 3 months correlation between Humble and Coala is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and Coala Life Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coala Life Group 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 Coala Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coala Life Group has no effect on the direction of Humble Group i.e., Humble Group and Coala Life go up and down completely randomly.

Pair Corralation between Humble Group and Coala Life

If you would invest  1,038  in Humble Group AB on September 24, 2024 and sell it today you would earn a total of  192.00  from holding Humble Group AB or generate 18.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	9.52%
Values	Daily Returns

Humble Group AB  vs.  Coala Life Group

Humble Group AB

Risk-Adjusted Performance

0 of 100

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 somewhat strong primary indicators, Humble Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Coala Life Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coala Life Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Coala Life is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Humble Group and Coala Life

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

The idea behind Humble Group AB and Coala Life Group 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.