Correlation Between Karnov Group and Footway Group
Can any of the company-specific risk be diversified away by investing in both Karnov Group and Footway 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 Karnov Group and Footway Group 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 Footway Group AB, you can compare the effects of market volatilities on Karnov Group and Footway 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 Karnov Group with a short position of Footway Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karnov Group and Footway Group.
Diversification Opportunities for Karnov Group and Footway Group
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Karnov and Footway is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Karnov Group AB and Footway Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Footway Group 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 Footway Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Footway Group AB has no effect on the direction of Karnov Group i.e., Karnov Group and Footway Group go up and down completely randomly.
Pair Corralation between Karnov Group and Footway Group
Assuming the 90 days trading horizon Karnov Group AB is expected to generate 0.27 times more return on investment than Footway Group. However, Karnov Group AB is 3.65 times less risky than Footway Group. It trades about 0.11 of its potential returns per unit of risk. Footway Group AB is currently generating about -0.16 per unit of risk. If you would invest 7,870 in Karnov Group AB on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Karnov Group AB or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karnov Group AB vs. Footway Group AB
Performance |
| Timeline |
| Karnov Group AB |
| Footway Group AB |
Karnov Group and Footway Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karnov Group and Footway Group
The main advantage of trading using opposite Karnov Group and Footway Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karnov Group position performs unexpectedly, Footway 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 Footway Group will offset losses from the drop in Footway Group's long position.| Karnov Group vs. Lagercrantz Group AB | Karnov Group vs. Biotage AB | Karnov Group vs. Vitec Software Group | Karnov Group vs. HMS Networks AB |
| Footway Group vs. Karnov Group AB | Footway Group vs. Nordic Waterproofing Holding | Footway Group vs. Lime Technologies 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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