Correlation Between CAG Group and Kjell Group
Can any of the company-specific risk be diversified away by investing in both CAG Group 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 CAG Group and Kjell Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAG Group AB and Kjell Group AB, you can compare the effects of market volatilities on CAG Group 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 CAG Group with a short position of Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and Kjell Group.
Diversification Opportunities for CAG Group and Kjell Group
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAG and Kjell is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group AB 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 CAG 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 CAG Group AB 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 CAG Group i.e., CAG Group and Kjell Group go up and down completely randomly.
Pair Corralation between CAG Group and Kjell Group
Assuming the 90 days trading horizon CAG Group AB is expected to generate 0.28 times more return on investment than Kjell Group. However, CAG Group AB is 3.54 times less risky than Kjell Group. It trades about 0.06 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.05 per unit of risk. If you would invest 9,165 in CAG Group AB on September 24, 2024 and sell it today you would earn a total of 1,935 from holding CAG Group AB or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAG Group AB vs. Kjell Group AB
Performance |
| Timeline |
| CAG Group AB |
| Kjell Group AB |
CAG Group and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAG Group and Kjell Group
The main advantage of trading using opposite CAG Group and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group 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.| CAG Group vs. FormPipe Software AB | CAG Group vs. Micro Systemation AB | CAG Group vs. CTT Systems AB | CAG Group vs. G5 Entertainment publ |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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