Correlation Between KABE Group and Volvo Car
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By analyzing existing cross correlation between KABE Group AB and Volvo Car AB, you can compare the effects of market volatilities on KABE Group and Volvo Car 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 Volvo Car. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Volvo Car.
Diversification Opportunities for KABE Group and Volvo Car
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KABE and Volvo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Volvo Car AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volvo Car 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 Volvo Car. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volvo Car AB has no effect on the direction of KABE Group i.e., KABE Group and Volvo Car go up and down completely randomly.
Pair Corralation between KABE Group and Volvo Car
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Volvo Car. But the stock apears to be less risky and, when comparing its historical volatility, KABE Group AB is 1.48 times less risky than Volvo Car. The stock trades about -0.14 of its potential returns per unit of risk. The Volvo Car AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,362 in Volvo Car AB on August 30, 2024 and sell it today you would lose (62.00) from holding Volvo Car AB or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KABE Group AB vs. Volvo Car AB
Performance |
| Timeline |
| KABE Group AB |
| Volvo Car AB |
KABE Group and Volvo Car Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KABE Group and Volvo Car
The main advantage of trading using opposite KABE Group and Volvo Car positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Volvo Car 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 Volvo Car will offset losses from the drop in Volvo Car'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 |
| Volvo Car vs. Samhllsbyggnadsbolaget i Norden | Volvo Car vs. Sinch AB | Volvo Car vs. Investor AB ser | Volvo Car vs. SSAB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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