Correlation Between Dlaboratory Sweden and K2A Knaust
Can any of the company-specific risk be diversified away by investing in both Dlaboratory Sweden and K2A Knaust 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 Dlaboratory Sweden and K2A Knaust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dlaboratory Sweden AB and K2A Knaust Andersson, you can compare the effects of market volatilities on Dlaboratory Sweden and K2A Knaust 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 Dlaboratory Sweden with a short position of K2A Knaust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dlaboratory Sweden and K2A Knaust.
Diversification Opportunities for Dlaboratory Sweden and K2A Knaust
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dlaboratory and K2A is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dlaboratory Sweden AB and K2A Knaust Andersson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2A Knaust Andersson and Dlaboratory Sweden 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 Dlaboratory Sweden AB are associated (or correlated) with K2A Knaust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2A Knaust Andersson has no effect on the direction of Dlaboratory Sweden i.e., Dlaboratory Sweden and K2A Knaust go up and down completely randomly.
Pair Corralation between Dlaboratory Sweden and K2A Knaust
Assuming the 90 days trading horizon Dlaboratory Sweden AB is expected to generate 2.17 times more return on investment than K2A Knaust. However, Dlaboratory Sweden is 2.17 times more volatile than K2A Knaust Andersson. It trades about 0.07 of its potential returns per unit of risk. K2A Knaust Andersson is currently generating about -0.34 per unit of risk. If you would invest 196.00 in Dlaboratory Sweden AB on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Dlaboratory Sweden AB or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dlaboratory Sweden AB vs. K2A Knaust Andersson
Performance |
| Timeline |
| Dlaboratory Sweden |
| K2A Knaust Andersson |
Dlaboratory Sweden and K2A Knaust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dlaboratory Sweden and K2A Knaust
The main advantage of trading using opposite Dlaboratory Sweden and K2A Knaust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dlaboratory Sweden position performs unexpectedly, K2A Knaust 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 K2A Knaust will offset losses from the drop in K2A Knaust's long position.| Dlaboratory Sweden vs. iZafe Group AB | Dlaboratory Sweden vs. Lipigon Pharmaceuticals AB | Dlaboratory Sweden vs. Garo AB | Dlaboratory Sweden vs. Akelius Residential Property |
| K2A Knaust vs. K Fast Holding AB | K2A Knaust vs. Nyfosa AB | K2A Knaust vs. Fastighets AB Balder | K2A Knaust vs. Catena 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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