Correlation Between Kjell Group and Generic Sweden
Can any of the company-specific risk be diversified away by investing in both Kjell Group and Generic Sweden 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 Generic Sweden 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 Generic Sweden publ, you can compare the effects of market volatilities on Kjell Group and Generic Sweden 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 Generic Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kjell Group and Generic Sweden.
Diversification Opportunities for Kjell Group and Generic Sweden
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kjell and Generic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kjell Group AB and Generic Sweden publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generic Sweden publ 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 Generic Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generic Sweden publ has no effect on the direction of Kjell Group i.e., Kjell Group and Generic Sweden go up and down completely randomly.
Pair Corralation between Kjell Group and Generic Sweden
Assuming the 90 days trading horizon Kjell Group AB is expected to under-perform the Generic Sweden. In addition to that, Kjell Group is 1.35 times more volatile than Generic Sweden publ. It trades about -0.06 of its total potential returns per unit of risk. Generic Sweden publ is currently generating about 0.05 per unit of volatility. If you would invest 3,352 in Generic Sweden publ on August 28, 2024 and sell it today you would earn a total of 1,788 from holding Generic Sweden publ or generate 53.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kjell Group AB vs. Generic Sweden publ
Performance |
| Timeline |
| Kjell Group AB |
| Generic Sweden publ |
Kjell Group and Generic Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kjell Group and Generic Sweden
The main advantage of trading using opposite Kjell Group and Generic Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kjell Group position performs unexpectedly, Generic Sweden 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 Generic Sweden will offset losses from the drop in Generic Sweden's long position.| Kjell Group vs. Precise Biometrics AB | Kjell Group vs. Anoto Group AB | Kjell Group vs. Bong AB | Kjell Group vs. Episurf Medical AB |
| Generic Sweden vs. FormPipe Software AB | Generic Sweden vs. Novotek AB | Generic Sweden vs. Hanza AB | Generic Sweden vs. Genovis 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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