Correlation Between KABE Group and Hansa Biopharma
Can any of the company-specific risk be diversified away by investing in both KABE Group and Hansa Biopharma 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 Hansa Biopharma 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 Hansa Biopharma AB, you can compare the effects of market volatilities on KABE Group and Hansa Biopharma 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 Hansa Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Hansa Biopharma.
Diversification Opportunities for KABE Group and Hansa Biopharma
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KABE and Hansa is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Hansa Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Biopharma 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 Hansa Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Biopharma AB has no effect on the direction of KABE Group i.e., KABE Group and Hansa Biopharma go up and down completely randomly.
Pair Corralation between KABE Group and Hansa Biopharma
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.45 times more return on investment than Hansa Biopharma. However, KABE Group AB is 2.25 times less risky than Hansa Biopharma. It trades about 0.06 of its potential returns per unit of risk. Hansa Biopharma AB is currently generating about 0.0 per unit of risk. If you would invest 19,135 in KABE Group AB on September 3, 2024 and sell it today you would earn a total of 10,765 from holding KABE Group AB or generate 56.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Hansa Biopharma AB
Performance |
| Timeline |
| KABE Group AB |
| Hansa Biopharma AB |
KABE Group and Hansa Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Hansa Biopharma
The main advantage of trading using opposite KABE Group and Hansa Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Hansa Biopharma 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 Hansa Biopharma will offset losses from the drop in Hansa Biopharma'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 |
| Hansa Biopharma vs. Simris Alg AB | Hansa Biopharma vs. Immunovia publ AB | Hansa Biopharma vs. Sedana Medical AB | Hansa Biopharma vs. KABE 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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