Correlation Between Kancera AB and Klaria Pharma

Can any of the company-specific risk be diversified away by investing in both Kancera AB and Klaria Pharma 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 Kancera AB and Klaria Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kancera AB and Klaria Pharma Holding, you can compare the effects of market volatilities on Kancera AB and Klaria Pharma 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 Kancera AB with a short position of Klaria Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kancera AB and Klaria Pharma.

Diversification Opportunities for Kancera AB and Klaria Pharma

0.83

Correlation Coefficient

Kancera AB  Klaria Pharma

Very poor diversification

The 3 months correlation between Kancera and Klaria is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kancera AB and Klaria Pharma Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klaria Pharma Holding and Kancera AB 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 Kancera AB are associated (or correlated) with Klaria Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klaria Pharma Holding has no effect on the direction of Kancera AB i.e., Kancera AB and Klaria Pharma go up and down completely randomly.

Pair Corralation between Kancera AB and Klaria Pharma

Assuming the 90 days trading horizon Kancera AB is expected to generate 1.05 times more return on investment than Klaria Pharma. However, Kancera AB is 1.05 times more volatile than Klaria Pharma Holding. It trades about -0.07 of its potential returns per unit of risk. Klaria Pharma Holding is currently generating about -0.12 per unit of risk. If you would invest  202.00  in Kancera AB on September 12, 2024 and sell it today you would lose (93.00) from holding Kancera AB or give up 46.04% of portfolio value over 90 days.

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

Kancera AB  vs.  Klaria Pharma Holding

Kancera AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kancera AB 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.

Klaria Pharma Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klaria Pharma Holding 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.

Pair Trading with Kancera AB and Klaria Pharma

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

The idea behind Kancera AB and Klaria Pharma Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.