Correlation Between KABE Group and Unibap AB
Can any of the company-specific risk be diversified away by investing in both KABE Group and Unibap 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 Unibap 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 Unibap AB, you can compare the effects of market volatilities on KABE Group and Unibap 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 Unibap AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Unibap AB.
Diversification Opportunities for KABE Group and Unibap AB
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KABE and Unibap is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Unibap AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibap 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 Unibap AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibap AB has no effect on the direction of KABE Group i.e., KABE Group and Unibap AB go up and down completely randomly.
Pair Corralation between KABE Group and Unibap AB
Assuming the 90 days trading horizon KABE Group is expected to generate 207.44 times less return on investment than Unibap AB. But when comparing it to its historical volatility, KABE Group AB is 1.81 times less risky than Unibap AB. It trades about 0.0 of its potential returns per unit of risk. Unibap AB is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Unibap AB on September 5, 2024 and sell it today you would earn a total of 69.00 from holding Unibap AB or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Unibap AB
Performance |
| Timeline |
| KABE Group AB |
| Unibap AB |
KABE Group and Unibap AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Unibap AB
The main advantage of trading using opposite KABE Group and Unibap AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Unibap 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 Unibap AB will offset losses from the drop in Unibap AB's long position.| KABE Group vs. Truecaller AB | KABE Group vs. Dedicare AB | KABE Group vs. RVRC Holding AB | KABE Group vs. AddLife AB |
| Unibap AB vs. Acconeer AB | Unibap AB vs. BIMobject AB | Unibap AB vs. Gapwaves AB Series | Unibap AB vs. Sedana Medical 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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