Correlation Between AB SKF and Kjell Group
Can any of the company-specific risk be diversified away by investing in both AB SKF and Kjell 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 AB SKF and Kjell Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB SKF and Kjell Group AB, you can compare the effects of market volatilities on AB SKF and Kjell 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 AB SKF with a short position of Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and Kjell Group.
Diversification Opportunities for AB SKF and Kjell Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SKF-A and Kjell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell Group AB and AB SKF 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 AB SKF are associated (or correlated) with Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of AB SKF i.e., AB SKF and Kjell Group go up and down completely randomly.
Pair Corralation between AB SKF and Kjell Group
Assuming the 90 days trading horizon AB SKF is expected to under-perform the Kjell Group. In addition to that, AB SKF is 1.26 times more volatile than Kjell Group AB. It trades about -0.29 of its total potential returns per unit of risk. Kjell Group AB is currently generating about 0.05 per unit of volatility. If you would invest 890.00 in Kjell Group AB on January 18, 2025 and sell it today you would earn a total of 20.00 from holding Kjell Group AB or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AB SKF vs. Kjell Group AB
Performance |
| Timeline |
| AB SKF |
| Kjell Group AB |
AB SKF and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and Kjell Group
The main advantage of trading using opposite AB SKF and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, Kjell 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 Kjell Group will offset losses from the drop in Kjell Group's long position.| AB SKF vs. AB SKF | AB SKF vs. Industrivarden AB ser | AB SKF vs. Trelleborg AB | AB SKF vs. Svenska Cellulosa Aktiebolaget |
| Kjell Group vs. Clas Ohlson AB | Kjell Group vs. Ctek AB | Kjell Group vs. Truecaller AB | Kjell Group vs. Dustin 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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