Correlation Between KABE Group and Triboron International

Can any of the company-specific risk be diversified away by investing in both KABE Group and Triboron International 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 Triboron International 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 Triboron International AB, you can compare the effects of market volatilities on KABE Group and Triboron International 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 Triboron International. Check out your portfolio center. Please also check ongoing floating volatility patterns of KABE Group and Triboron International.

Diversification Opportunities for KABE Group and Triboron International

0.58

Correlation Coefficient

KABE Group  Triboron International

Very weak diversification

The 3 months correlation between KABE and Triboron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding KABE Group AB and Triboron International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triboron International 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 Triboron International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triboron International has no effect on the direction of KABE Group i.e., KABE Group and Triboron International go up and down completely randomly.

Pair Corralation between KABE Group and Triboron International

Assuming the 90 days trading horizon KABE Group AB is expected to generate 0.35 times more return on investment than Triboron International. However, KABE Group AB is 2.84 times less risky than Triboron International. It trades about 0.01 of its potential returns per unit of risk. Triboron International AB is currently generating about -0.2 per unit of risk. If you would invest  29,900  in KABE Group AB on September 22, 2024 and sell it today you would earn a total of  0.00  from holding KABE Group AB or generate 0.0% return on investment over 90 days.

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

KABE Group AB  vs.  Triboron International AB

KABE Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Triboron International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with KABE Group and Triboron International

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

The idea behind KABE Group AB and Triboron International 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.