Correlation Between Kambi Group and Idun Industrier

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

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

Diversification Opportunities for Kambi Group and Idun Industrier

-0.8

Correlation Coefficient

Kambi Group  Idun Industrier

Pay attention - limited upside

The 3 months correlation between Kambi and Idun is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group PLC and Idun Industrier AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idun Industrier AB and Kambi 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 Kambi Group PLC are associated (or correlated) with Idun Industrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idun Industrier AB has no effect on the direction of Kambi Group i.e., Kambi Group and Idun Industrier go up and down completely randomly.

Pair Corralation between Kambi Group and Idun Industrier

Assuming the 90 days trading horizon Kambi Group PLC is expected to under-perform the Idun Industrier. In addition to that, Kambi Group is 1.09 times more volatile than Idun Industrier AB. It trades about -0.1 of its total potential returns per unit of risk. Idun Industrier AB is currently generating about 0.06 per unit of volatility. If you would invest  26,100  in Idun Industrier AB on September 4, 2024 and sell it today you would earn a total of  2,100  from holding Idun Industrier AB or generate 8.05% return on investment over 90 days.

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

Kambi Group PLC  vs.  Idun Industrier AB

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 unsteady 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.

Idun Industrier AB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Idun Industrier AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Idun Industrier may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kambi Group and Idun Industrier

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

The idea behind Kambi Group PLC and Idun Industrier 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.