Correlation Between KABE Group and C Rad
Can any of the company-specific risk be diversified away by investing in both KABE Group and C Rad 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 C Rad 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 C Rad AB, you can compare the effects of market volatilities on KABE Group and C Rad 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 C Rad. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and C Rad.
Diversification Opportunities for KABE Group and C Rad
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and CRAD-B is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and C Rad AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Rad 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 C Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Rad AB has no effect on the direction of KABE Group i.e., KABE Group and C Rad go up and down completely randomly.
Pair Corralation between KABE Group and C Rad
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the C Rad. In addition to that, KABE Group is 1.19 times more volatile than C Rad AB. It trades about -0.09 of its total potential returns per unit of risk. C Rad AB is currently generating about 0.06 per unit of volatility. If you would invest 2,965 in C Rad AB on September 1, 2024 and sell it today you would earn a total of 60.00 from holding C Rad AB or generate 2.02% 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. C Rad AB
Performance |
| Timeline |
| KABE Group AB |
| C Rad AB |
KABE Group and C Rad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and C Rad
The main advantage of trading using opposite KABE Group and C Rad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, C Rad 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 C Rad will offset losses from the drop in C Rad'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 |
| C Rad vs. CellaVision AB | C Rad vs. Biotage AB | C Rad vs. Boule Diagnostics AB | C Rad vs. RaySearch Laboratories 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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