Correlation Between KABE Group and Enad Global
Can any of the company-specific risk be diversified away by investing in both KABE Group and Enad Global 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 Enad Global 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 Enad Global 7, you can compare the effects of market volatilities on KABE Group and Enad Global 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 Enad Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Enad Global.
Diversification Opportunities for KABE Group and Enad Global
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KABE and Enad is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Enad Global 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enad Global 7 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 Enad Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enad Global 7 has no effect on the direction of KABE Group i.e., KABE Group and Enad Global go up and down completely randomly.
Pair Corralation between KABE Group and Enad Global
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.59 times more return on investment than Enad Global. However, KABE Group AB is 1.7 times less risky than Enad Global. It trades about 0.05 of its potential returns per unit of risk. Enad Global 7 is currently generating about -0.03 per unit of risk. If you would invest 20,788 in KABE Group AB on October 30, 2024 and sell it today you would earn a total of 10,012 from holding KABE Group AB or generate 48.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Enad Global 7
Performance |
| Timeline |
| KABE Group AB |
| Enad Global 7 |
KABE Group and Enad Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Enad Global
The main advantage of trading using opposite KABE Group and Enad Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Enad Global 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 Enad Global will offset losses from the drop in Enad Global'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 |
| Enad Global vs. Stillfront Group AB | Enad Global vs. Embracer Group AB | Enad Global vs. G5 Entertainment publ | Enad Global vs. Sinch 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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