Correlation Between Kambi Group and Zignsec AB

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

Diversification Opportunities for Kambi Group and Zignsec AB

-0.85

Correlation Coefficient

Kambi Group  Zignsec AB

Pay attention - limited upside

The 3 months correlation between Kambi and Zignsec is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group PLC and Zignsec AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zignsec 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 Zignsec AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zignsec AB has no effect on the direction of Kambi Group i.e., Kambi Group and Zignsec AB go up and down completely randomly.

Pair Corralation between Kambi Group and Zignsec AB

Assuming the 90 days trading horizon Kambi Group PLC is expected to under-perform the Zignsec AB. In addition to that, Kambi Group is 1.13 times more volatile than Zignsec AB. It trades about -0.13 of its total potential returns per unit of risk. Zignsec AB is currently generating about 0.1 per unit of volatility. If you would invest  121.00  in Zignsec AB on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Zignsec AB or generate 12.4% 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.  Zignsec 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 uncertain 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.

Zignsec AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zignsec AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zignsec AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kambi Group and Zignsec AB

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

The idea behind Kambi Group PLC and Zignsec 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.