Correlation Between K2A Knaust and ALM Equity
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By analyzing existing cross correlation between K2A Knaust Andersson and ALM Equity AB, you can compare the effects of market volatilities on K2A Knaust and ALM Equity 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 K2A Knaust with a short position of ALM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2A Knaust and ALM Equity.
Diversification Opportunities for K2A Knaust and ALM Equity
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between K2A and ALM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding K2A Knaust Andersson and ALM Equity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Equity AB and K2A Knaust 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 K2A Knaust Andersson are associated (or correlated) with ALM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Equity AB has no effect on the direction of K2A Knaust i.e., K2A Knaust and ALM Equity go up and down completely randomly.
Pair Corralation between K2A Knaust and ALM Equity
Assuming the 90 days trading horizon K2A Knaust Andersson is expected to generate 4.87 times more return on investment than ALM Equity. However, K2A Knaust is 4.87 times more volatile than ALM Equity AB. It trades about 0.1 of its potential returns per unit of risk. ALM Equity AB is currently generating about 0.11 per unit of risk. If you would invest 580.00 in K2A Knaust Andersson on September 5, 2024 and sell it today you would earn a total of 350.00 from holding K2A Knaust Andersson or generate 60.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2A Knaust Andersson vs. ALM Equity AB
Performance |
| Timeline |
| K2A Knaust Andersson |
| ALM Equity AB |
K2A Knaust and ALM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2A Knaust and ALM Equity
The main advantage of trading using opposite K2A Knaust and ALM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2A Knaust position performs unexpectedly, ALM Equity 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 ALM Equity will offset losses from the drop in ALM Equity's long position.The idea behind K2A Knaust Andersson and ALM Equity 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.| ALM Equity vs. Acrinova AB | ALM Equity vs. Nyfosa AB | ALM Equity vs. ALM Equity AB | ALM Equity vs. K2A Knaust Andersson |
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 Stocks Directory module to find actively traded stocks across global markets.
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