Correlation Between Desenio Group and Karnov Group

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

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

Diversification Opportunities for Desenio Group and Karnov Group

-0.06

Correlation Coefficient

Desenio Group  Karnov Group

Good diversification

The 3 months correlation between Desenio and Karnov is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Desenio Group AB and Karnov Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karnov Group AB and Desenio 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 Desenio Group AB are associated (or correlated) with Karnov Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karnov Group AB has no effect on the direction of Desenio Group i.e., Desenio Group and Karnov Group go up and down completely randomly.

Pair Corralation between Desenio Group and Karnov Group

Assuming the 90 days trading horizon Desenio Group AB is expected to under-perform the Karnov Group. In addition to that, Desenio Group is 4.25 times more volatile than Karnov Group AB. It trades about -0.14 of its total potential returns per unit of risk. Karnov Group AB is currently generating about 0.05 per unit of volatility. If you would invest  8,230  in Karnov Group AB on December 30, 2024 and sell it today you would earn a total of  420.00  from holding Karnov Group AB or generate 5.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Desenio Group AB  vs.  Karnov Group AB

Desenio Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Desenio Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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.

Karnov Group AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Karnov Group AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Karnov Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Desenio Group and Karnov Group

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

The idea behind Desenio Group AB and Karnov Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..