Correlation Between Arctic Gold and Kakel Max

Can any of the company-specific risk be diversified away by investing in both Arctic Gold and Kakel Max 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 Arctic Gold and Kakel Max into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arctic Gold Publ and Kakel Max AB, you can compare the effects of market volatilities on Arctic Gold and Kakel Max 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 Arctic Gold with a short position of Kakel Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Gold and Kakel Max.

Diversification Opportunities for Arctic Gold and Kakel Max

-0.45

Correlation Coefficient

Arctic Gold  Kakel Max

Very good diversification

The 3 months correlation between Arctic and Kakel is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Gold Publ and Kakel Max AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakel Max AB and Arctic Gold 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 Arctic Gold Publ are associated (or correlated) with Kakel Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakel Max AB has no effect on the direction of Arctic Gold i.e., Arctic Gold and Kakel Max go up and down completely randomly.

Pair Corralation between Arctic Gold and Kakel Max

Assuming the 90 days trading horizon Arctic Gold Publ is expected to generate 9.34 times more return on investment than Kakel Max. However, Arctic Gold is 9.34 times more volatile than Kakel Max AB. It trades about 0.22 of its potential returns per unit of risk. Kakel Max AB is currently generating about -0.16 per unit of risk. If you would invest  212.00  in Arctic Gold Publ on December 30, 2024 and sell it today you would earn a total of  824.00  from holding Arctic Gold Publ or generate 388.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Arctic Gold Publ  vs.  Kakel Max AB

Arctic Gold Publ

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Gold Publ are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Arctic Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kakel Max AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kakel Max AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Arctic Gold and Kakel Max

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

The idea behind Arctic Gold Publ and Kakel Max AB 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.