Correlation Between Brd Klee and HH International

Can any of the company-specific risk be diversified away by investing in both Brd Klee and HH International 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 Brd Klee and HH International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brd Klee AS and HH International AS, you can compare the effects of market volatilities on Brd Klee and HH International 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 Brd Klee with a short position of HH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brd Klee and HH International.

Diversification Opportunities for Brd Klee and HH International

0.59

Correlation Coefficient

Brd Klee  HH International

Very weak diversification

The 3 months correlation between Brd and HH International is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Brd Klee AS and HH International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HH International and Brd Klee 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 Brd Klee AS are associated (or correlated) with HH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HH International has no effect on the direction of Brd Klee i.e., Brd Klee and HH International go up and down completely randomly.

Pair Corralation between Brd Klee and HH International

Assuming the 90 days trading horizon Brd Klee is expected to generate 7.98 times less return on investment than HH International. In addition to that, Brd Klee is 1.2 times more volatile than HH International AS. It trades about 0.0 of its total potential returns per unit of risk. HH International AS is currently generating about 0.05 per unit of volatility. If you would invest  6,900  in HH International AS on August 25, 2024 and sell it today you would earn a total of  1,100  from holding HH International AS or generate 15.94% return on investment over 90 days.

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

Brd Klee AS  vs.  HH International AS

Brd Klee AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brd Klee AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Brd Klee is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HH International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HH International AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Brd Klee and HH International

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

The idea behind Brd Klee AS and HH International 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.