Correlation Between KABE Group and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both KABE Group and Clas Ohlson 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 Clas Ohlson 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 Clas Ohlson AB, you can compare the effects of market volatilities on KABE Group and Clas Ohlson 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 Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Clas Ohlson.
Diversification Opportunities for KABE Group and Clas Ohlson
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and Clas is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson 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 Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of KABE Group i.e., KABE Group and Clas Ohlson go up and down completely randomly.
Pair Corralation between KABE Group and Clas Ohlson
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Clas Ohlson. But the stock apears to be less risky and, when comparing its historical volatility, KABE Group AB is 1.16 times less risky than Clas Ohlson. The stock trades about -0.14 of its potential returns per unit of risk. The Clas Ohlson AB is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 22,800 in Clas Ohlson AB on November 27, 2024 and sell it today you would earn a total of 1,640 from holding Clas Ohlson AB or generate 7.19% 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. Clas Ohlson AB
Performance |
| Timeline |
| KABE Group AB |
| Clas Ohlson AB |
KABE Group and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Clas Ohlson
The main advantage of trading using opposite KABE Group and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson'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 |
| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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