Correlation Between Castellum and KlaraBo Sverige

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

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

Diversification Opportunities for Castellum and KlaraBo Sverige

0.22

Correlation Coefficient

Castellum  KlaraBo Sverige

Modest diversification

The 3 months correlation between Castellum and KlaraBo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Castellum AB and KlaraBo Sverige AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KlaraBo Sverige AB and Castellum 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 Castellum AB are associated (or correlated) with KlaraBo Sverige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KlaraBo Sverige AB has no effect on the direction of Castellum i.e., Castellum and KlaraBo Sverige go up and down completely randomly.

Pair Corralation between Castellum and KlaraBo Sverige

Assuming the 90 days trading horizon Castellum AB is expected to generate 0.61 times more return on investment than KlaraBo Sverige. However, Castellum AB is 1.65 times less risky than KlaraBo Sverige. It trades about -0.08 of its potential returns per unit of risk. KlaraBo Sverige AB is currently generating about -0.12 per unit of risk. If you would invest  13,285  in Castellum AB on September 1, 2024 and sell it today you would lose (385.00) from holding Castellum AB or give up 2.9% of portfolio value over 90 days.

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

Castellum AB  vs.  KlaraBo Sverige AB

Castellum AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castellum 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.

KlaraBo Sverige AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KlaraBo Sverige AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KlaraBo Sverige is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Castellum and KlaraBo Sverige

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

The idea behind Castellum AB and KlaraBo Sverige 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.