Correlation Between KABE Group and Organoclick
Can any of the company-specific risk be diversified away by investing in both KABE Group and Organoclick 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 Organoclick 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 Organoclick AB, you can compare the effects of market volatilities on KABE Group and Organoclick 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 Organoclick. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Organoclick.
Diversification Opportunities for KABE Group and Organoclick
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KABE and Organoclick is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Organoclick AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organoclick 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 Organoclick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organoclick AB has no effect on the direction of KABE Group i.e., KABE Group and Organoclick go up and down completely randomly.
Pair Corralation between KABE Group and Organoclick
Assuming the 90 days trading horizon KABE Group AB is expected to generate 1.0 times more return on investment than Organoclick. However, KABE Group AB is 1.0 times less risky than Organoclick. It trades about -0.13 of its potential returns per unit of risk. Organoclick AB is currently generating about -0.23 per unit of risk. If you would invest 31,994 in KABE Group AB on August 31, 2024 and sell it today you would lose (2,194) from holding KABE Group AB or give up 6.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Organoclick AB
Performance |
| Timeline |
| KABE Group AB |
| Organoclick AB |
KABE Group and Organoclick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Organoclick
The main advantage of trading using opposite KABE Group and Organoclick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Organoclick 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 Organoclick will offset losses from the drop in Organoclick'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 |
| Organoclick vs. SaltX Technology Holding | Organoclick vs. Nexam Chemical Holding | Organoclick vs. AAC Clyde Space | Organoclick vs. Triboron International 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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