Correlation Between Kakel Max and FM Mattsson

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

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

Diversification Opportunities for Kakel Max and FM Mattsson

-0.72

Correlation Coefficient

Kakel Max  FM Mattsson

Pay attention - limited upside

The 3 months correlation between Kakel and FMM-B is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kakel Max AB and FM Mattsson Mora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FM Mattsson Mora and Kakel Max 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 Kakel Max AB are associated (or correlated) with FM Mattsson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FM Mattsson Mora has no effect on the direction of Kakel Max i.e., Kakel Max and FM Mattsson go up and down completely randomly.

Pair Corralation between Kakel Max and FM Mattsson

Assuming the 90 days trading horizon Kakel Max AB is expected to generate 1.72 times more return on investment than FM Mattsson. However, Kakel Max is 1.72 times more volatile than FM Mattsson Mora. It trades about 0.03 of its potential returns per unit of risk. FM Mattsson Mora is currently generating about 0.0 per unit of risk. If you would invest  915.00  in Kakel Max AB on September 3, 2024 and sell it today you would earn a total of  65.00  from holding Kakel Max AB or generate 7.1% return on investment over 90 days.

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

Kakel Max AB  vs.  FM Mattsson Mora

Kakel Max AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kakel Max AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kakel Max may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FM Mattsson Mora

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days FM Mattsson Mora has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, FM Mattsson is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kakel Max and FM Mattsson

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

The idea behind Kakel Max AB and FM Mattsson Mora 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .