Correlation Between KABE Group and AVTECH Sweden
Can any of the company-specific risk be diversified away by investing in both KABE Group and AVTECH Sweden 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 AVTECH Sweden 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 AVTECH Sweden AB, you can compare the effects of market volatilities on KABE Group and AVTECH Sweden 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 AVTECH Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and AVTECH Sweden.
Diversification Opportunities for KABE Group and AVTECH Sweden
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KABE and AVTECH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and AVTECH Sweden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVTECH Sweden 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 AVTECH Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVTECH Sweden AB has no effect on the direction of KABE Group i.e., KABE Group and AVTECH Sweden go up and down completely randomly.
Pair Corralation between KABE Group and AVTECH Sweden
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.54 times more return on investment than AVTECH Sweden. However, KABE Group AB is 1.84 times less risky than AVTECH Sweden. It trades about 0.07 of its potential returns per unit of risk. AVTECH Sweden AB is currently generating about 0.03 per unit of risk. If you would invest 18,331 in KABE Group AB on August 29, 2024 and sell it today you would earn a total of 11,869 from holding KABE Group AB or generate 64.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. AVTECH Sweden AB
Performance |
| Timeline |
| KABE Group AB |
| AVTECH Sweden AB |
KABE Group and AVTECH Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and AVTECH Sweden
The main advantage of trading using opposite KABE Group and AVTECH Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, AVTECH Sweden 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 AVTECH Sweden will offset losses from the drop in AVTECH Sweden's long position.| KABE Group vs. Awardit AB | KABE Group vs. RVRC Holding AB | KABE Group vs. Smart Eye AB | KABE Group vs. IAR Systems Group |
| AVTECH Sweden vs. AroCell AB | AVTECH Sweden vs. aXichem AB | AVTECH Sweden vs. Gaming Corps AB | AVTECH Sweden vs. Alelion Energy Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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