Correlation Between KABE Group and Arctic Gold
Can any of the company-specific risk be diversified away by investing in both KABE Group and Arctic Gold 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 Arctic Gold 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 Arctic Gold Publ, you can compare the effects of market volatilities on KABE Group and Arctic Gold 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 Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Arctic Gold.
Diversification Opportunities for KABE Group and Arctic Gold
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between KABE and Arctic is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ 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 Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of KABE Group i.e., KABE Group and Arctic Gold go up and down completely randomly.
Pair Corralation between KABE Group and Arctic Gold
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.35 times more return on investment than Arctic Gold. However, KABE Group AB is 2.85 times less risky than Arctic Gold. It trades about 0.05 of its potential returns per unit of risk. Arctic Gold Publ is currently generating about 0.01 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Arctic Gold Publ
Performance |
| Timeline |
| KABE Group AB |
| Arctic Gold Publ |
KABE Group and Arctic Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Arctic Gold
The main advantage of trading using opposite KABE Group and Arctic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Arctic Gold 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 Arctic Gold will offset losses from the drop in Arctic Gold'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 |
| Arctic Gold vs. Svenska Aerogel Holding | Arctic Gold vs. Kancera AB | Arctic Gold vs. BIMobject AB | Arctic Gold vs. KABE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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