Correlation Between KABE Group and Norva24 Group
Can any of the company-specific risk be diversified away by investing in both KABE Group and Norva24 Group 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 Norva24 Group 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 Norva24 Group AB, you can compare the effects of market volatilities on KABE Group and Norva24 Group 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 Norva24 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Norva24 Group.
Diversification Opportunities for KABE Group and Norva24 Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and Norva24 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Norva24 Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norva24 Group 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 Norva24 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norva24 Group AB has no effect on the direction of KABE Group i.e., KABE Group and Norva24 Group go up and down completely randomly.
Pair Corralation between KABE Group and Norva24 Group
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.83 times more return on investment than Norva24 Group. However, KABE Group AB is 1.21 times less risky than Norva24 Group. It trades about 0.05 of its potential returns per unit of risk. Norva24 Group AB is currently generating about -0.02 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 Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
KABE Group AB vs. Norva24 Group AB
Performance |
| Timeline |
| KABE Group AB |
| Norva24 Group AB |
KABE Group and Norva24 Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Norva24 Group
The main advantage of trading using opposite KABE Group and Norva24 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Norva24 Group 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 Norva24 Group will offset losses from the drop in Norva24 Group'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 |
| Norva24 Group vs. Fasadgruppen Group AB | Norva24 Group vs. Green Landscaping Group | Norva24 Group vs. Volati AB | Norva24 Group vs. Instalco Intressenter 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |