Correlation Between KABE Group and JonDeTech Sensors
Can any of the company-specific risk be diversified away by investing in both KABE Group and JonDeTech Sensors 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 JonDeTech Sensors 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 JonDeTech Sensors, you can compare the effects of market volatilities on KABE Group and JonDeTech Sensors 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 JonDeTech Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and JonDeTech Sensors.
Diversification Opportunities for KABE Group and JonDeTech Sensors
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KABE and JonDeTech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and JonDeTech Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JonDeTech Sensors 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 JonDeTech Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JonDeTech Sensors has no effect on the direction of KABE Group i.e., KABE Group and JonDeTech Sensors go up and down completely randomly.
Pair Corralation between KABE Group and JonDeTech Sensors
Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.27 times more return on investment than JonDeTech Sensors. However, KABE Group AB is 3.69 times less risky than JonDeTech Sensors. It trades about -0.08 of its potential returns per unit of risk. JonDeTech Sensors is currently generating about -0.09 per unit of risk. If you would invest 32,981 in KABE Group AB on September 6, 2024 and sell it today you would lose (3,181) from holding KABE Group AB or give up 9.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
KABE Group AB vs. JonDeTech Sensors
Performance |
Timeline |
KABE Group AB |
JonDeTech Sensors |
KABE Group and JonDeTech Sensors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KABE Group and JonDeTech Sensors
The main advantage of trading using opposite KABE Group and JonDeTech Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KABE Group position performs unexpectedly, JonDeTech Sensors 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 JonDeTech Sensors will offset losses from the drop in JonDeTech Sensors' 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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