Correlation Between KABE Group and Transtema Group
Can any of the company-specific risk be diversified away by investing in both KABE Group and Transtema 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 Transtema 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 Transtema Group AB, you can compare the effects of market volatilities on KABE Group and Transtema 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 Transtema Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Transtema Group.
Diversification Opportunities for KABE Group and Transtema Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between KABE and Transtema is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Transtema Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transtema 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 Transtema Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transtema Group AB has no effect on the direction of KABE Group i.e., KABE Group and Transtema Group go up and down completely randomly.
Pair Corralation between KABE Group and Transtema Group
Assuming the 90 days trading horizon KABE Group AB is expected to generate 1.13 times more return on investment than Transtema Group. However, KABE Group is 1.13 times more volatile than Transtema Group AB. It trades about 0.13 of its potential returns per unit of risk. Transtema Group AB is currently generating about -0.15 per unit of risk. If you would invest 29,300 in KABE Group AB on October 20, 2024 and sell it today you would earn a total of 800.00 from holding KABE Group AB or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Transtema Group AB
Performance |
| Timeline |
| KABE Group AB |
| Transtema Group AB |
KABE Group and Transtema Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Transtema Group
The main advantage of trading using opposite KABE Group and Transtema Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Transtema 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 Transtema Group will offset losses from the drop in Transtema 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 |
| Transtema Group vs. Hexatronic Group AB | Transtema Group vs. Systemair AB | Transtema Group vs. Resurs Holding AB | Transtema Group vs. Prevas 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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