Correlation Between SBB-B and Kambi Group
Can any of the company-specific risk be diversified away by investing in both SBB-B and Kambi 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 SBB-B and Kambi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhllsbyggnadsbolaget i Norden and Kambi Group PLC, you can compare the effects of market volatilities on SBB-B and Kambi 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 SBB-B with a short position of Kambi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBB-B and Kambi Group.
Diversification Opportunities for SBB-B and Kambi Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SBB-B and Kambi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samhllsbyggnadsbolaget i Norde and Kambi Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group PLC and SBB-B 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 Samhllsbyggnadsbolaget i Norden are associated (or correlated) with Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group PLC has no effect on the direction of SBB-B i.e., SBB-B and Kambi Group go up and down completely randomly.
Pair Corralation between SBB-B and Kambi Group
Assuming the 90 days trading horizon Samhllsbyggnadsbolaget i Norden is expected to under-perform the Kambi Group. In addition to that, SBB-B is 1.52 times more volatile than Kambi Group PLC. It trades about -0.26 of its total potential returns per unit of risk. Kambi Group PLC is currently generating about -0.11 per unit of volatility. If you would invest 11,760 in Kambi Group PLC on November 29, 2024 and sell it today you would lose (760.00) from holding Kambi Group PLC or give up 6.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhllsbyggnadsbolaget i Norde vs. Kambi Group PLC
Performance |
| Timeline |
| Samhllsbyggnadsbolaget |
| Kambi Group PLC |
SBB-B and Kambi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBB-B and Kambi Group
The main advantage of trading using opposite SBB-B and Kambi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBB-B position performs unexpectedly, Kambi 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 Kambi Group will offset losses from the drop in Kambi Group's long position.The idea behind Samhllsbyggnadsbolaget i Norden and Kambi Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kambi Group vs. Evolution AB | Kambi Group vs. Embracer Group AB | Kambi Group vs. Betsson AB | Kambi Group vs. Catena Media plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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