Correlation Between Moment Group and Karolinska Development
Can any of the company-specific risk be diversified away by investing in both Moment Group and Karolinska Development 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 Moment Group and Karolinska Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moment Group AB and Karolinska Development AB, you can compare the effects of market volatilities on Moment Group and Karolinska Development 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 Moment Group with a short position of Karolinska Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moment Group and Karolinska Development.
Diversification Opportunities for Moment Group and Karolinska Development
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Moment and Karolinska is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Moment Group AB and Karolinska Development AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karolinska Development and Moment 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 Moment Group AB are associated (or correlated) with Karolinska Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karolinska Development has no effect on the direction of Moment Group i.e., Moment Group and Karolinska Development go up and down completely randomly.
Pair Corralation between Moment Group and Karolinska Development
Assuming the 90 days trading horizon Moment Group AB is expected to generate 1.38 times more return on investment than Karolinska Development. However, Moment Group is 1.38 times more volatile than Karolinska Development AB. It trades about 0.01 of its potential returns per unit of risk. Karolinska Development AB is currently generating about -0.09 per unit of risk. If you would invest 1,060 in Moment Group AB on September 12, 2024 and sell it today you would lose (20.00) from holding Moment Group AB or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Moment Group AB vs. Karolinska Development AB
Performance |
| Timeline |
| Moment Group AB |
| Karolinska Development |
Moment Group and Karolinska Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moment Group and Karolinska Development
The main advantage of trading using opposite Moment Group and Karolinska Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moment Group position performs unexpectedly, Karolinska Development 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 Karolinska Development will offset losses from the drop in Karolinska Development's long position.| Moment Group vs. Karolinska Development AB | Moment Group vs. Oncopeptides AB | Moment Group vs. Episurf Medical AB |
| Karolinska Development vs. Oncopeptides AB | Karolinska Development vs. Cantargia AB | Karolinska Development vs. BioInvent International AB | Karolinska Development vs. Moberg Pharma 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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