Correlation Between Volvo Car and KABE Group
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By analyzing existing cross correlation between Volvo Car AB and KABE Group AB, you can compare the effects of market volatilities on Volvo Car 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 Volvo Car with a short position of KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volvo Car and KABE Group.
Diversification Opportunities for Volvo Car and KABE Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volvo and KABE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Volvo Car 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 Volvo Car 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 Volvo Car 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 Volvo Car i.e., Volvo Car and KABE Group go up and down completely randomly.
Pair Corralation between Volvo Car and KABE Group
Assuming the 90 days trading horizon Volvo Car AB is expected to generate 1.48 times more return on investment than KABE Group. However, Volvo Car is 1.48 times more volatile than KABE Group AB. It trades about -0.02 of its potential returns per unit of risk. KABE Group AB is currently generating about -0.14 per unit of risk. If you would invest 2,362 in Volvo Car AB on August 30, 2024 and sell it today you would lose (62.00) from holding Volvo Car AB or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volvo Car AB vs. KABE Group AB
Performance |
| Timeline |
| Volvo Car AB |
| KABE Group AB |
Volvo Car and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volvo Car and KABE Group
The main advantage of trading using opposite Volvo Car and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volvo Car 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.| Volvo Car vs. Samhllsbyggnadsbolaget i Norden | Volvo Car vs. Sinch AB | Volvo Car vs. Investor AB ser | Volvo Car vs. SSAB 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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