Correlation Between Clinical Laserthermia and KABE Group
Can any of the company-specific risk be diversified away by investing in both Clinical Laserthermia 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 Clinical Laserthermia and KABE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clinical Laserthermia Systems and KABE Group AB, you can compare the effects of market volatilities on Clinical Laserthermia 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 Clinical Laserthermia with a short position of KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clinical Laserthermia and KABE Group.
Diversification Opportunities for Clinical Laserthermia and KABE Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clinical and KABE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Clinical Laserthermia Systems 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 Clinical Laserthermia 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 Clinical Laserthermia Systems 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 Clinical Laserthermia i.e., Clinical Laserthermia and KABE Group go up and down completely randomly.
Pair Corralation between Clinical Laserthermia and KABE Group
Assuming the 90 days trading horizon Clinical Laserthermia Systems is expected to generate 4.07 times more return on investment than KABE Group. However, Clinical Laserthermia is 4.07 times more volatile than KABE Group AB. It trades about 0.07 of its potential returns per unit of risk. KABE Group AB is currently generating about 0.12 per unit of risk. If you would invest 366.00 in Clinical Laserthermia Systems on October 30, 2024 and sell it today you would earn a total of 16.00 from holding Clinical Laserthermia Systems or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Clinical Laserthermia Systems vs. KABE Group AB
Performance |
| Timeline |
| Clinical Laserthermia |
| KABE Group AB |
Clinical Laserthermia and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clinical Laserthermia and KABE Group
The main advantage of trading using opposite Clinical Laserthermia and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clinical Laserthermia 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.| Clinical Laserthermia vs. Cantargia AB | Clinical Laserthermia vs. Episurf Medical AB | Clinical Laserthermia vs. Karolinska Development AB | Clinical Laserthermia vs. Acarix AS |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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