Correlation Between Sileon AB and KABE Group
Can any of the company-specific risk be diversified away by investing in both Sileon AB and KABE 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 Sileon AB and KABE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sileon AB and KABE Group AB, you can compare the effects of market volatilities on Sileon AB and KABE 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 Sileon AB with a short position of KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sileon AB and KABE Group.
Diversification Opportunities for Sileon AB and KABE Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sileon and KABE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sileon AB and KABE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KABE Group AB and Sileon AB 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 Sileon AB are associated (or correlated) with KABE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KABE Group AB has no effect on the direction of Sileon AB i.e., Sileon AB and KABE Group go up and down completely randomly.
Pair Corralation between Sileon AB and KABE Group
Assuming the 90 days trading horizon Sileon AB is expected to under-perform the KABE Group. In addition to that, Sileon AB is 3.38 times more volatile than KABE Group AB. It trades about -0.08 of its total potential returns per unit of risk. KABE Group AB is currently generating about 0.05 per unit of volatility. If you would invest 20,221 in KABE Group AB on October 28, 2024 and sell it today you would earn a total of 10,679 from holding KABE Group AB or generate 52.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sileon AB vs. KABE Group AB
Performance |
| Timeline |
| Sileon AB |
| KABE Group AB |
Sileon AB and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sileon AB and KABE Group
The main advantage of trading using opposite Sileon AB and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sileon AB position performs unexpectedly, KABE 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 KABE Group will offset losses from the drop in KABE Group's long position.| Sileon AB vs. KABE Group AB | Sileon AB vs. IAR Systems Group | Sileon AB vs. Mekonomen AB | Sileon AB vs. Norva24 Group AB |
| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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