Correlation Between B3 Consulting and Kjell Group
Can any of the company-specific risk be diversified away by investing in both B3 Consulting and Kjell 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 B3 Consulting and Kjell Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B3 Consulting Group and Kjell Group AB, you can compare the effects of market volatilities on B3 Consulting and Kjell 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 B3 Consulting with a short position of Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of B3 Consulting and Kjell Group.
Diversification Opportunities for B3 Consulting and Kjell Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between B3 Consulting and Kjell is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding B3 Consulting Group and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell Group AB and B3 Consulting 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 B3 Consulting Group are associated (or correlated) with Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of B3 Consulting i.e., B3 Consulting and Kjell Group go up and down completely randomly.
Pair Corralation between B3 Consulting and Kjell Group
Assuming the 90 days horizon B3 Consulting Group is expected to generate 0.76 times more return on investment than Kjell Group. However, B3 Consulting Group is 1.32 times less risky than Kjell Group. It trades about -0.03 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.07 per unit of risk. If you would invest 13,430 in B3 Consulting Group on September 24, 2024 and sell it today you would lose (6,180) from holding B3 Consulting Group or give up 46.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B3 Consulting Group vs. Kjell Group AB
Performance |
| Timeline |
| B3 Consulting Group |
| Kjell Group AB |
B3 Consulting and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B3 Consulting and Kjell Group
The main advantage of trading using opposite B3 Consulting and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B3 Consulting position performs unexpectedly, Kjell 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 Kjell Group will offset losses from the drop in Kjell Group's long position.| B3 Consulting vs. FormPipe Software AB | B3 Consulting vs. Micro Systemation AB | B3 Consulting vs. CTT Systems AB | B3 Consulting vs. CAG Group AB |
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 Correlations module to find global opportunities by holding instruments from different markets.
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