Correlation Between Pierce Group and Karnov Group
Can any of the company-specific risk be diversified away by investing in both Pierce Group and Karnov 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 Pierce Group and Karnov Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pierce Group AB and Karnov Group AB, you can compare the effects of market volatilities on Pierce Group and Karnov 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 Pierce Group with a short position of Karnov Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pierce Group and Karnov Group.
Diversification Opportunities for Pierce Group and Karnov Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pierce and Karnov is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pierce Group AB and Karnov Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karnov Group AB and Pierce 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 Pierce Group AB are associated (or correlated) with Karnov Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karnov Group AB has no effect on the direction of Pierce Group i.e., Pierce Group and Karnov Group go up and down completely randomly.
Pair Corralation between Pierce Group and Karnov Group
Assuming the 90 days trading horizon Pierce Group AB is expected to under-perform the Karnov Group. In addition to that, Pierce Group is 1.13 times more volatile than Karnov Group AB. It trades about -0.05 of its total potential returns per unit of risk. Karnov Group AB is currently generating about 0.0 per unit of volatility. If you would invest 8,510 in Karnov Group AB on September 3, 2024 and sell it today you would lose (380.00) from holding Karnov Group AB or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pierce Group AB vs. Karnov Group AB
Performance |
| Timeline |
| Pierce Group AB |
| Karnov Group AB |
Pierce Group and Karnov Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pierce Group and Karnov Group
The main advantage of trading using opposite Pierce Group and Karnov Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pierce Group position performs unexpectedly, Karnov 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 Karnov Group will offset losses from the drop in Karnov Group's long position.| Pierce Group vs. Rugvista Group AB | Pierce Group vs. Karnov Group AB | Pierce Group vs. Nordic Waterproofing Holding | Pierce Group vs. BHG Group AB |
| Karnov Group vs. Lagercrantz Group AB | Karnov Group vs. Biotage AB | Karnov Group vs. Vitec Software Group | Karnov Group vs. HMS Networks 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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