Correlation Between KABE Group and Nanologica
Can any of the company-specific risk be diversified away by investing in both KABE Group and Nanologica 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 Nanologica 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 Nanologica AB, you can compare the effects of market volatilities on KABE Group and Nanologica 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 Nanologica. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Nanologica.
Diversification Opportunities for KABE Group and Nanologica
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KABE and Nanologica is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Nanologica AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanologica 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 Nanologica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanologica AB has no effect on the direction of KABE Group i.e., KABE Group and Nanologica go up and down completely randomly.
Pair Corralation between KABE Group and Nanologica
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.74 times more return on investment than Nanologica. However, KABE Group AB is 1.35 times less risky than Nanologica. It trades about 0.03 of its potential returns per unit of risk. Nanologica AB is currently generating about -0.41 per unit of risk. If you would invest 29,624 in KABE Group AB on September 3, 2024 and sell it today you would earn a total of 276.00 from holding KABE Group AB or generate 0.93% 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. Nanologica AB
Performance |
| Timeline |
| KABE Group AB |
| Nanologica AB |
KABE Group and Nanologica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Nanologica
The main advantage of trading using opposite KABE Group and Nanologica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Nanologica 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 Nanologica will offset losses from the drop in Nanologica'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 |
| Nanologica vs. Simris Alg AB | Nanologica vs. Immunovia publ AB | Nanologica vs. Sedana Medical AB | Nanologica 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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