Correlation Between Karnov Group and Rugvista Group

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

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

Diversification Opportunities for Karnov Group and Rugvista Group

0.04

Correlation Coefficient

Karnov Group  Rugvista Group

Significant diversification

The 3 months correlation between Karnov and Rugvista is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Karnov Group AB and Rugvista Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugvista Group AB and Karnov 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 Karnov Group AB are associated (or correlated) with Rugvista Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugvista Group AB has no effect on the direction of Karnov Group i.e., Karnov Group and Rugvista Group go up and down completely randomly.

Pair Corralation between Karnov Group and Rugvista Group

Assuming the 90 days trading horizon Karnov Group AB is expected to generate 1.07 times more return on investment than Rugvista Group. However, Karnov Group is 1.07 times more volatile than Rugvista Group AB. It trades about 0.06 of its potential returns per unit of risk. Rugvista Group AB is currently generating about 0.0 per unit of risk. If you would invest  4,910  in Karnov Group AB on October 12, 2024 and sell it today you would earn a total of  3,490  from holding Karnov Group AB or generate 71.08% return on investment over 90 days.

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

Karnov Group AB  vs.  Rugvista Group AB

Karnov Group AB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Karnov Group AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Karnov Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Rugvista Group AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rugvista Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Rugvista Group 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 Karnov Group and Rugvista Group

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

The idea behind Karnov Group AB and Rugvista Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.