Correlation Between SECITS Holding and Know IT
Can any of the company-specific risk be diversified away by investing in both SECITS Holding and Know IT 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 SECITS Holding and Know IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECITS Holding AB and Know IT AB, you can compare the effects of market volatilities on SECITS Holding and Know IT 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 SECITS Holding with a short position of Know IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECITS Holding and Know IT.
Diversification Opportunities for SECITS Holding and Know IT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SECITS and Know is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SECITS Holding AB and Know IT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Know IT AB and SECITS Holding 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 SECITS Holding AB are associated (or correlated) with Know IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Know IT AB has no effect on the direction of SECITS Holding i.e., SECITS Holding and Know IT go up and down completely randomly.
Pair Corralation between SECITS Holding and Know IT
Assuming the 90 days trading horizon SECITS Holding AB is expected to under-perform the Know IT. In addition to that, SECITS Holding is 4.29 times more volatile than Know IT AB. It trades about -0.03 of its total potential returns per unit of risk. Know IT AB is currently generating about -0.02 per unit of volatility. If you would invest 19,952 in Know IT AB on August 26, 2024 and sell it today you would lose (6,612) from holding Know IT AB or give up 33.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECITS Holding AB vs. Know IT AB
Performance |
| Timeline |
| SECITS Holding AB |
| Know IT AB |
SECITS Holding and Know IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECITS Holding and Know IT
The main advantage of trading using opposite SECITS Holding and Know IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECITS Holding position performs unexpectedly, Know IT 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 Know IT will offset losses from the drop in Know IT's long position.| SECITS Holding vs. Svedbergs i Dalstorp | SECITS Holding vs. Know IT AB | SECITS Holding vs. FormPipe Software AB |
| Know IT vs. Enea AB | Know IT vs. Lagercrantz Group AB | Know IT vs. Vitec Software Group | Know IT vs. Addnode Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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