Correlation Between Clinical Laserthermia and KebNi AB

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Can any of the company-specific risk be diversified away by investing in both Clinical Laserthermia and KebNi AB 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 KebNi AB 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 KebNi AB, you can compare the effects of market volatilities on Clinical Laserthermia and KebNi AB 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 KebNi AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clinical Laserthermia and KebNi AB.

Diversification Opportunities for Clinical Laserthermia and KebNi AB

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Clinical and KebNi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clinical Laserthermia Systems and KebNi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KebNi 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 KebNi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KebNi AB has no effect on the direction of Clinical Laserthermia i.e., Clinical Laserthermia and KebNi AB go up and down completely randomly.

Pair Corralation between Clinical Laserthermia and KebNi AB

Assuming the 90 days trading horizon Clinical Laserthermia Systems is expected to generate 1.92 times more return on investment than KebNi AB. However, Clinical Laserthermia is 1.92 times more volatile than KebNi AB. It trades about -0.02 of its potential returns per unit of risk. KebNi AB is currently generating about -0.16 per unit of risk. If you would invest  505.00  in Clinical Laserthermia Systems on September 2, 2024 and sell it today you would lose (85.00) from holding Clinical Laserthermia Systems or give up 16.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Clinical Laserthermia Systems  vs.  KebNi AB

 Performance 
       Timeline  
Clinical Laserthermia 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Clinical Laserthermia Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
KebNi AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KebNi AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Clinical Laserthermia and KebNi AB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clinical Laserthermia and KebNi AB

The main advantage of trading using opposite Clinical Laserthermia and KebNi AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clinical Laserthermia position performs unexpectedly, KebNi AB 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 KebNi AB will offset losses from the drop in KebNi AB's long position.
The idea behind Clinical Laserthermia Systems and KebNi 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.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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