Correlation Between KABE Group and Arctic Gold
Can any of the company-specific risk be diversified away by investing in both KABE Group and Arctic Gold 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 KABE Group and Arctic Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KABE Group AB and Arctic Gold Publ, you can compare the effects of market volatilities on KABE Group and Arctic Gold 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 KABE Group with a short position of Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Arctic Gold.
Diversification Opportunities for KABE Group and Arctic Gold
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KABE and Arctic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ and KABE 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 KABE Group AB are associated (or correlated) with Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of KABE Group i.e., KABE Group and Arctic Gold go up and down completely randomly.
Pair Corralation between KABE Group and Arctic Gold
Assuming the 90 days trading horizon KABE Group AB is expected to under-perform the Arctic Gold. But the stock apears to be less risky and, when comparing its historical volatility, KABE Group AB is 4.07 times less risky than Arctic Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Arctic Gold Publ is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Arctic Gold Publ on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Arctic Gold Publ or generate 8.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KABE Group AB vs. Arctic Gold Publ
Performance |
Timeline |
KABE Group AB |
Arctic Gold Publ |
KABE Group and Arctic Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KABE Group and Arctic Gold
The main advantage of trading using opposite KABE Group and Arctic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, Arctic Gold 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 Arctic Gold will offset losses from the drop in Arctic Gold's long position.KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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