Correlation Between KABE Group and Acuvi AB
Can any of the company-specific risk be diversified away by investing in both KABE Group and Acuvi 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 KABE Group and Acuvi AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KABE Group AB and Acuvi AB, you can compare the effects of market volatilities on KABE Group and Acuvi 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 KABE Group with a short position of Acuvi AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Acuvi AB.
Diversification Opportunities for KABE Group and Acuvi AB
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and Acuvi is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Acuvi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuvi AB and KABE Group 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 KABE Group AB are associated (or correlated) with Acuvi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuvi AB has no effect on the direction of KABE Group i.e., KABE Group and Acuvi AB go up and down completely randomly.
Pair Corralation between KABE Group and Acuvi AB
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.57 times more return on investment than Acuvi AB. However, KABE Group AB is 1.77 times less risky than Acuvi AB. It trades about 0.05 of its potential returns per unit of risk. Acuvi AB is currently generating about 0.0 per unit of risk. If you would invest 19,985 in KABE Group AB on August 26, 2024 and sell it today you would earn a total of 10,015 from holding KABE Group AB or generate 50.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Acuvi AB
Performance |
| Timeline |
| KABE Group AB |
| Acuvi AB |
KABE Group and Acuvi AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Acuvi AB
The main advantage of trading using opposite KABE Group and Acuvi AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Acuvi 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 Acuvi AB will offset losses from the drop in Acuvi AB's long position.| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
| Acuvi AB vs. Divio Technologies AB | Acuvi AB vs. XMReality AB | Acuvi AB vs. KABE Group AB | Acuvi AB vs. IAR Systems 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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