Correlation Between Generic Sweden and Kjell Group
Can any of the company-specific risk be diversified away by investing in both Generic Sweden 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 Generic Sweden and Kjell Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generic Sweden publ and Kjell Group AB, you can compare the effects of market volatilities on Generic Sweden 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 Generic Sweden with a short position of Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Sweden and Kjell Group.
Diversification Opportunities for Generic Sweden and Kjell Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Generic and Kjell is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Generic Sweden publ 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 Generic 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 Generic Sweden publ 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 Generic Sweden i.e., Generic Sweden and Kjell Group go up and down completely randomly.
Pair Corralation between Generic Sweden and Kjell Group
Assuming the 90 days trading horizon Generic Sweden publ is expected to generate 0.79 times more return on investment than Kjell Group. However, Generic Sweden publ is 1.26 times less risky than Kjell Group. It trades about 0.19 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.6 per unit of risk. If you would invest 4,470 in Generic Sweden publ on August 24, 2024 and sell it today you would earn a total of 490.00 from holding Generic Sweden publ or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generic Sweden publ vs. Kjell Group AB
Performance |
| Timeline |
| Generic Sweden publ |
| Kjell Group AB |
Generic Sweden and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generic Sweden and Kjell Group
The main advantage of trading using opposite Generic Sweden and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generic Sweden 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.| Generic Sweden vs. Novotek AB | Generic Sweden vs. Addnode Group AB | Generic Sweden vs. Softronic AB | Generic Sweden vs. CTT Systems AB |
| Kjell Group vs. Clas Ohlson AB | Kjell Group vs. Ctek AB | Kjell Group vs. Truecaller AB | Kjell Group vs. Dustin 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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