Correlation Between Kjell Group and Anoto Group
Can any of the company-specific risk be diversified away by investing in both Kjell Group and Anoto 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 Kjell Group and Anoto Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kjell Group AB and Anoto Group AB, you can compare the effects of market volatilities on Kjell Group and Anoto 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 Kjell Group with a short position of Anoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kjell Group and Anoto Group.
Diversification Opportunities for Kjell Group and Anoto Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kjell and Anoto is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kjell Group AB and Anoto Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anoto Group AB and Kjell 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 Kjell Group AB are associated (or correlated) with Anoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anoto Group AB has no effect on the direction of Kjell Group i.e., Kjell Group and Anoto Group go up and down completely randomly.
Pair Corralation between Kjell Group and Anoto Group
Assuming the 90 days trading horizon Kjell Group AB is expected to generate 0.43 times more return on investment than Anoto Group. However, Kjell Group AB is 2.33 times less risky than Anoto Group. It trades about -0.3 of its potential returns per unit of risk. Anoto Group AB is currently generating about -0.18 per unit of risk. If you would invest 1,495 in Kjell Group AB on September 3, 2024 and sell it today you would lose (290.00) from holding Kjell Group AB or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kjell Group AB vs. Anoto Group AB
Performance |
| Timeline |
| Kjell Group AB |
| Anoto Group AB |
Kjell Group and Anoto Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kjell Group and Anoto Group
The main advantage of trading using opposite Kjell Group and Anoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kjell Group position performs unexpectedly, Anoto 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 Anoto Group will offset losses from the drop in Anoto Group's long position.| Kjell Group vs. Clas Ohlson AB | Kjell Group vs. Ctek AB | Kjell Group vs. Truecaller AB | Kjell Group vs. Dustin Group AB |
| Anoto Group vs. Enea AB | Anoto Group vs. Novotek AB | Anoto Group vs. Addnode Group AB | Anoto Group vs. Softronic 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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