Correlation Between KABE Group and EQT AB
Can any of the company-specific risk be diversified away by investing in both KABE Group and EQT 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 EQT 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 EQT AB, you can compare the effects of market volatilities on KABE Group and EQT 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 EQT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and EQT AB.
Diversification Opportunities for KABE Group and EQT AB
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KABE and EQT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and EQT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT 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 EQT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT AB has no effect on the direction of KABE Group i.e., KABE Group and EQT AB go up and down completely randomly.
Pair Corralation between KABE Group and EQT AB
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.84 times more return on investment than EQT AB. However, KABE Group AB is 1.18 times less risky than EQT AB. It trades about 0.05 of its potential returns per unit of risk. EQT AB is currently generating about 0.04 per unit of risk. If you would invest 19,702 in KABE Group AB on August 31, 2024 and sell it today you would earn a total of 10,098 from holding KABE Group AB or generate 51.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KABE Group AB vs. EQT AB
Performance |
| Timeline |
| KABE Group AB |
| EQT AB |
KABE Group and EQT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and EQT AB
The main advantage of trading using opposite KABE Group and EQT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, EQT 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 EQT AB will offset losses from the drop in EQT AB'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 |
| EQT AB vs. Investor AB ser | EQT AB vs. Investment AB Latour | EQT AB vs. Industrivarden AB ser | EQT AB vs. Tele2 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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