Correlation Between Idun Industrier and Kambi Group

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

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

Diversification Opportunities for Idun Industrier and Kambi Group

-0.84

Correlation Coefficient

Idun Industrier  Kambi Group

Pay attention - limited upside

The 3 months correlation between Idun and Kambi is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Idun Industrier AB and Kambi Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group PLC and Idun Industrier 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 Idun Industrier AB are associated (or correlated) with Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group PLC has no effect on the direction of Idun Industrier i.e., Idun Industrier and Kambi Group go up and down completely randomly.

Pair Corralation between Idun Industrier and Kambi Group

Assuming the 90 days trading horizon Idun Industrier AB is expected to generate 0.96 times more return on investment than Kambi Group. However, Idun Industrier AB is 1.04 times less risky than Kambi Group. It trades about 0.14 of its potential returns per unit of risk. Kambi Group PLC is currently generating about -0.13 per unit of risk. If you would invest  25,000  in Idun Industrier AB on September 12, 2024 and sell it today you would earn a total of  5,000  from holding Idun Industrier AB or generate 20.0% return on investment over 90 days.

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

Idun Industrier AB  vs.  Kambi Group PLC

Idun Industrier AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Idun Industrier AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Idun Industrier sustained solid returns over the last few months and may actually be approaching a breakup point.

Kambi Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kambi Group PLC 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Idun Industrier and Kambi Group

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

The idea behind Idun Industrier AB and Kambi Group PLC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.