Correlation Between KABE Group and Alimak Hek
Can any of the company-specific risk be diversified away by investing in both KABE Group and Alimak Hek 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 Alimak Hek 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 Alimak Hek Group, you can compare the effects of market volatilities on KABE Group and Alimak Hek 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 Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Alimak Hek.
Diversification Opportunities for KABE Group and Alimak Hek
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KABE and Alimak is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group 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 Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of KABE Group i.e., KABE Group and Alimak Hek go up and down completely randomly.
Pair Corralation between KABE Group and Alimak Hek
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Alimak Hek. In addition to that, KABE Group is 1.77 times more volatile than Alimak Hek Group. It trades about -0.09 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about -0.07 per unit of volatility. If you would invest 12,220 in Alimak Hek Group on September 1, 2024 and sell it today you would lose (280.00) from holding Alimak Hek Group or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
KABE Group AB vs. Alimak Hek Group
Performance |
| Timeline |
| KABE Group AB |
| Alimak Hek Group |
KABE Group and Alimak Hek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Alimak Hek
The main advantage of trading using opposite KABE Group and Alimak Hek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Alimak Hek 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 Alimak Hek will offset losses from the drop in Alimak Hek'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 |
| Alimak Hek vs. Samhllsbyggnadsbolaget i Norden | Alimak Hek vs. Sinch AB | Alimak Hek vs. Embracer Group AB | Alimak Hek vs. Evolution 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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