Correlation Between Karnov Group and Ambea AB
Can any of the company-specific risk be diversified away by investing in both Karnov Group and Ambea 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 Karnov Group and Ambea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karnov Group AB and Ambea AB, you can compare the effects of market volatilities on Karnov Group and Ambea 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 Karnov Group with a short position of Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karnov Group and Ambea AB.
Diversification Opportunities for Karnov Group and Ambea AB
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Karnov and Ambea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Karnov Group AB and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB and Karnov 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 Karnov Group AB are associated (or correlated) with Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of Karnov Group i.e., Karnov Group and Ambea AB go up and down completely randomly.
Pair Corralation between Karnov Group and Ambea AB
Assuming the 90 days trading horizon Karnov Group is expected to generate 1.14 times less return on investment than Ambea AB. But when comparing it to its historical volatility, Karnov Group AB is 1.45 times less risky than Ambea AB. It trades about 0.04 of its potential returns per unit of risk. Ambea AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9,450 in Ambea AB on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Ambea AB or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karnov Group AB vs. Ambea AB
Performance |
| Timeline |
| Karnov Group AB |
| Ambea AB |
Karnov Group and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karnov Group and Ambea AB
The main advantage of trading using opposite Karnov Group and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karnov Group position performs unexpectedly, Ambea 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 Ambea AB will offset losses from the drop in Ambea AB's long position.| Karnov Group vs. Attendo AB | Karnov Group vs. Ambea AB | Karnov Group vs. Inwido AB | Karnov Group vs. AcadeMedia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |