Correlation Between KABE Group and Scout Gaming
Can any of the company-specific risk be diversified away by investing in both KABE Group and Scout Gaming 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 Scout Gaming 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 Scout Gaming Group, you can compare the effects of market volatilities on KABE Group and Scout Gaming 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 Scout Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Scout Gaming.
Diversification Opportunities for KABE Group and Scout Gaming
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and Scout is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Scout Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Gaming Group 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 Scout Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Gaming Group has no effect on the direction of KABE Group i.e., KABE Group and Scout Gaming go up and down completely randomly.
Pair Corralation between KABE Group and Scout Gaming
Assuming the 90 days trading horizon KABE Group is expected to generate 18.27 times less return on investment than Scout Gaming. But when comparing it to its historical volatility, KABE Group AB is 3.73 times less risky than Scout Gaming. It trades about 0.01 of its potential returns per unit of risk. Scout Gaming Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Scout Gaming Group on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Scout Gaming Group or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Scout Gaming Group
Performance |
| Timeline |
| KABE Group AB |
| Scout Gaming Group |
KABE Group and Scout Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Scout Gaming
The main advantage of trading using opposite KABE Group and Scout Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Scout Gaming 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 Scout Gaming will offset losses from the drop in Scout Gaming'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 |
| Scout Gaming vs. Idogen AB | Scout Gaming vs. Clean Motion AB | Scout Gaming vs. Arion banki hf | Scout Gaming 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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