Correlation Between Apple and KABE Group
Can any of the company-specific risk be diversified away by investing in both Apple and KABE 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 Apple and KABE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and KABE Group AB, you can compare the effects of market volatilities on Apple and KABE 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 Apple with a short position of KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and KABE Group.
Diversification Opportunities for Apple and KABE Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and KABE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and KABE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KABE Group AB and Apple 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 Apple Inc are associated (or correlated) with KABE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KABE Group AB has no effect on the direction of Apple i.e., Apple and KABE Group go up and down completely randomly.
Pair Corralation between Apple and KABE Group
Given the investment horizon of 90 days Apple Inc is expected to under-perform the KABE Group. In addition to that, Apple is 1.18 times more volatile than KABE Group AB. It trades about -0.39 of its total potential returns per unit of risk. KABE Group AB is currently generating about 0.16 per unit of volatility. If you would invest 29,800 in KABE Group AB on October 24, 2024 and sell it today you would earn a total of 900.00 from holding KABE Group AB or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Apple Inc vs. KABE Group AB
Performance |
| Timeline |
| Apple Inc |
| KABE Group AB |
Apple and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and KABE Group
The main advantage of trading using opposite Apple and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, KABE 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 KABE Group will offset losses from the drop in KABE Group's long position.The idea behind Apple Inc and KABE 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.| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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