Correlation Between KABE Group and Enzymatica Publ
Can any of the company-specific risk be diversified away by investing in both KABE Group and Enzymatica Publ 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 Enzymatica Publ 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 Enzymatica publ AB, you can compare the effects of market volatilities on KABE Group and Enzymatica Publ 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 Enzymatica Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Enzymatica Publ.
Diversification Opportunities for KABE Group and Enzymatica Publ
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KABE and Enzymatica is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Enzymatica publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzymatica publ 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 Enzymatica Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzymatica publ AB has no effect on the direction of KABE Group i.e., KABE Group and Enzymatica Publ go up and down completely randomly.
Pair Corralation between KABE Group and Enzymatica Publ
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Enzymatica Publ. But the stock apears to be less risky and, when comparing its historical volatility, KABE Group AB is 1.25 times less risky than Enzymatica Publ. The stock trades about -0.08 of its potential returns per unit of risk. The Enzymatica publ AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 177.00 in Enzymatica publ AB on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Enzymatica publ AB or generate 0.0% 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. Enzymatica publ AB
Performance |
| Timeline |
| KABE Group AB |
| Enzymatica publ AB |
KABE Group and Enzymatica Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Enzymatica Publ
The main advantage of trading using opposite KABE Group and Enzymatica Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Enzymatica Publ 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 Enzymatica Publ will offset losses from the drop in Enzymatica Publ'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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