Correlation Between Bonzun AB and Kontigo Care

Can any of the company-specific risk be diversified away by investing in both Bonzun AB and Kontigo Care 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 Bonzun AB and Kontigo Care into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Bonzun AB and Kontigo Care

-0.57

Correlation Coefficient

Bonzun AB  Kontigo Care

Excellent diversification

The 3 months correlation between Bonzun and Kontigo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bonzun AB and Kontigo Care AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontigo Care AB and Bonzun 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 Bonzun AB are associated (or correlated) with Kontigo Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontigo Care AB has no effect on the direction of Bonzun AB i.e., Bonzun AB and Kontigo Care go up and down completely randomly.

Pair Corralation between Bonzun AB and Kontigo Care

Assuming the 90 days trading horizon Bonzun AB is expected to under-perform the Kontigo Care. In addition to that, Bonzun AB is 2.5 times more volatile than Kontigo Care AB. It trades about -0.07 of its total potential returns per unit of risk. Kontigo Care AB is currently generating about 0.0 per unit of volatility. If you would invest  254.00  in Kontigo Care AB on November 28, 2024 and sell it today you would lose (4.00) from holding Kontigo Care AB or give up 1.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Bonzun AB  vs.  Kontigo Care AB

Bonzun AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bonzun AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Bonzun AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Kontigo Care AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kontigo Care AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bonzun AB and Kontigo Care

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

The idea behind Bonzun AB and Kontigo Care 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.