Correlation Between KABE Group and Stillfront Group
Can any of the company-specific risk be diversified away by investing in both KABE Group and Stillfront 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 Stillfront 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 Stillfront Group AB, you can compare the effects of market volatilities on KABE Group and Stillfront 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 Stillfront Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Stillfront Group.
Diversification Opportunities for KABE Group and Stillfront Group
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KABE and Stillfront is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Stillfront Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillfront 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 Stillfront Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillfront Group has no effect on the direction of KABE Group i.e., KABE Group and Stillfront Group go up and down completely randomly.
Pair Corralation between KABE Group and Stillfront Group
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.68 times more return on investment than Stillfront Group. However, KABE Group AB is 1.47 times less risky than Stillfront Group. It trades about -0.12 of its potential returns per unit of risk. Stillfront Group AB is currently generating about -0.23 per unit of risk. If you would invest 26,500 in KABE Group AB on January 24, 2025 and sell it today you would lose (1,530) from holding KABE Group AB or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Stillfront Group AB
Performance |
| Timeline |
| KABE Group AB |
| Stillfront Group |
KABE Group and Stillfront Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Stillfront Group
The main advantage of trading using opposite KABE Group and Stillfront Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Stillfront 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 Stillfront Group will offset losses from the drop in Stillfront 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 |
| Stillfront Group vs. Flexion Mobile PLC | Stillfront Group vs. iZafe Group AB | Stillfront Group vs. KABE Group AB | Stillfront Group vs. IAR Systems Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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