Correlation Between KABE Group and Sileon AB
Can any of the company-specific risk be diversified away by investing in both KABE Group and Sileon AB 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 Sileon AB 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 Sileon AB, you can compare the effects of market volatilities on KABE Group and Sileon AB 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Sileon AB.
Diversification Opportunities for KABE Group and Sileon AB
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KABE and Sileon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of KABE Group i.e., KABE Group and Sileon AB go up and down completely randomly.
Pair Corralation between KABE Group and Sileon AB
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.31 times more return on investment than Sileon AB. However, KABE Group AB is 3.28 times less risky than Sileon AB. It trades about 0.05 of its potential returns per unit of risk. Sileon AB is currently generating about -0.08 per unit of risk. If you would invest 19,891 in KABE Group AB on October 15, 2024 and sell it today you would earn a total of 10,109 from holding KABE Group AB or generate 50.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Sileon AB
Performance |
| Timeline |
| KABE Group AB |
| Sileon AB |
KABE Group and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Sileon AB
The main advantage of trading using opposite KABE Group and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.| KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group | KABE Group vs. VBG Group AB |
| Sileon AB vs. Nitro Games Oyj | Sileon AB vs. Spago Nanomedical AB | Sileon AB vs. FormPipe Software AB | Sileon AB vs. Scandic Hotels 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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