Correlation Between Addnode Group and Kentima Holding

Can any of the company-specific risk be diversified away by investing in both Addnode Group and Kentima Holding 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 Addnode Group and Kentima Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Addnode Group AB and Kentima Holding publ, you can compare the effects of market volatilities on Addnode Group and Kentima Holding 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 Addnode Group with a short position of Kentima Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addnode Group and Kentima Holding.

Diversification Opportunities for Addnode Group and Kentima Holding

0.56

Correlation Coefficient

Addnode Group  Kentima Holding

Very weak diversification

The 3 months correlation between Addnode and Kentima is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and Kentima Holding publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentima Holding publ and Addnode Group 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 Addnode Group AB are associated (or correlated) with Kentima Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentima Holding publ has no effect on the direction of Addnode Group i.e., Addnode Group and Kentima Holding go up and down completely randomly.

Pair Corralation between Addnode Group and Kentima Holding

Assuming the 90 days trading horizon Addnode Group AB is expected to generate 0.61 times more return on investment than Kentima Holding. However, Addnode Group AB is 1.63 times less risky than Kentima Holding. It trades about 0.03 of its potential returns per unit of risk. Kentima Holding publ is currently generating about 0.0 per unit of risk. If you would invest  10,330  in Addnode Group AB on December 2, 2024 and sell it today you would earn a total of  240.00  from holding Addnode Group AB or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Addnode Group AB  vs.  Kentima Holding publ

Addnode Group AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addnode Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Addnode Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kentima Holding publ

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kentima Holding publ are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kentima Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Addnode Group and Kentima Holding

The main advantage of trading using opposite Addnode Group and Kentima Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addnode Group position performs unexpectedly, Kentima Holding 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 Kentima Holding will offset losses from the drop in Kentima Holding's long position.

The idea behind Addnode Group AB and Kentima Holding publ 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.