Correlation Between Vow ASA and Huddlestock Fintech

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

By analyzing existing cross correlation between Vow ASA and Huddlestock Fintech As, you can compare the effects of market volatilities on Vow ASA and Huddlestock Fintech 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 Vow ASA with a short position of Huddlestock Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow ASA and Huddlestock Fintech.

Diversification Opportunities for Vow ASA and Huddlestock Fintech

0.17

Correlation Coefficient

Vow ASA  Huddlestock Fintech

Average diversification

The 3 months correlation between Vow and Huddlestock is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and Huddlestock Fintech As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huddlestock Fintech and Vow ASA 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 Vow ASA are associated (or correlated) with Huddlestock Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huddlestock Fintech has no effect on the direction of Vow ASA i.e., Vow ASA and Huddlestock Fintech go up and down completely randomly.

Pair Corralation between Vow ASA and Huddlestock Fintech

Assuming the 90 days trading horizon Vow ASA is expected to under-perform the Huddlestock Fintech. In addition to that, Vow ASA is 1.32 times more volatile than Huddlestock Fintech As. It trades about -0.08 of its total potential returns per unit of risk. Huddlestock Fintech As is currently generating about 0.0 per unit of volatility. If you would invest  64.00  in Huddlestock Fintech As on September 5, 2024 and sell it today you would lose (6.00) from holding Huddlestock Fintech As or give up 9.38% of portfolio value over 90 days.

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

Vow ASA  vs.  Huddlestock Fintech As

Vow ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vow ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Huddlestock Fintech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huddlestock Fintech As has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Huddlestock Fintech is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vow ASA and Huddlestock Fintech

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

The idea behind Vow ASA and Huddlestock Fintech As 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 Transaction History module to view history of all your transactions and understand their impact on performance.