Correlation Between KABE Group and Boliden AB
Can any of the company-specific risk be diversified away by investing in both KABE Group and Boliden 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 Boliden 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 Boliden AB, you can compare the effects of market volatilities on KABE Group and Boliden 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 Boliden AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Boliden AB.
Diversification Opportunities for KABE Group and Boliden AB
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KABE and Boliden is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Boliden AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boliden 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 Boliden AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boliden AB has no effect on the direction of KABE Group i.e., KABE Group and Boliden AB go up and down completely randomly.
Pair Corralation between KABE Group and Boliden AB
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.95 times more return on investment than Boliden AB. However, KABE Group AB is 1.06 times less risky than Boliden AB. It trades about 0.05 of its potential returns per unit of risk. Boliden AB is currently generating about 0.0 per unit of risk. If you would invest 19,702 in KABE Group AB on August 28, 2024 and sell it today you would earn a total of 10,298 from holding KABE Group AB or generate 52.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
KABE Group AB vs. Boliden AB
Performance |
| Timeline |
| KABE Group AB |
| Boliden AB |
KABE Group and Boliden AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Boliden AB
The main advantage of trading using opposite KABE Group and Boliden AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Boliden 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 Boliden AB will offset losses from the drop in Boliden AB'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 |
| Boliden AB vs. Sandvik AB | Boliden AB vs. AB SKF | Boliden AB vs. Alfa Laval AB | Boliden AB vs. AB Electrolux |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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