Correlation Between KABE Group and EEducation Albert
Can any of the company-specific risk be diversified away by investing in both KABE Group and EEducation Albert 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 EEducation Albert 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 eEducation Albert AB, you can compare the effects of market volatilities on KABE Group and EEducation Albert 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 EEducation Albert. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and EEducation Albert.
Diversification Opportunities for KABE Group and EEducation Albert
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KABE and EEducation is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and eEducation Albert AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eEducation Albert 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 EEducation Albert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eEducation Albert has no effect on the direction of KABE Group i.e., KABE Group and EEducation Albert go up and down completely randomly.
Pair Corralation between KABE Group and EEducation Albert
Assuming the 90 days trading horizon KABE Group is expected to generate 3.4 times less return on investment than EEducation Albert. But when comparing it to its historical volatility, KABE Group AB is 2.76 times less risky than EEducation Albert. It trades about 0.12 of its potential returns per unit of risk. eEducation Albert AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 274.00 in eEducation Albert AB on October 30, 2024 and sell it today you would earn a total of 24.00 from holding eEducation Albert AB or generate 8.76% 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. eEducation Albert AB
Performance |
| Timeline |
| KABE Group AB |
| eEducation Albert |
KABE Group and EEducation Albert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and EEducation Albert
The main advantage of trading using opposite KABE Group and EEducation Albert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, EEducation Albert 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 EEducation Albert will offset losses from the drop in EEducation Albert'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 |
| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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