Correlation Between Humble Group and Norva24 Group

Can any of the company-specific risk be diversified away by investing in both Humble Group and Norva24 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 Norva24 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 Norva24 Group AB, you can compare the effects of market volatilities on Humble Group and Norva24 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 Norva24 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humble Group and Norva24 Group.

Diversification Opportunities for Humble Group and Norva24 Group

-0.62

Correlation Coefficient

Humble Group  Norva24 Group

Excellent diversification

The 3 months correlation between Humble and Norva24 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Humble Group AB and Norva24 Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norva24 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 Norva24 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norva24 Group AB has no effect on the direction of Humble Group i.e., Humble Group and Norva24 Group go up and down completely randomly.

Pair Corralation between Humble Group and Norva24 Group

Assuming the 90 days trading horizon Humble Group AB is expected to under-perform the Norva24 Group. But the stock apears to be less risky and, when comparing its historical volatility, Humble Group AB is 3.89 times less risky than Norva24 Group. The stock trades about -0.2 of its potential returns per unit of risk. The Norva24 Group AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,700  in Norva24 Group AB on December 25, 2024 and sell it today you would earn a total of  920.00  from holding Norva24 Group AB or generate 34.07% return on investment over 90 days.

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

Humble Group AB  vs.  Norva24 Group AB

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.

Norva24 Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Norva24 Group AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Norva24 Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humble Group and Norva24 Group

The main advantage of trading using opposite Humble Group and Norva24 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humble Group position performs unexpectedly, Norva24 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 Norva24 Group will offset losses from the drop in Norva24 Group's long position.

The idea behind Humble Group AB and Norva24 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.