Correlation Between K Fast and Logistea

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

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

Diversification Opportunities for K Fast and Logistea

0.91

Correlation Coefficient

K Fast  Logistea

Almost no diversification

The 3 months correlation between KFAST-B and Logistea is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding K Fast Holding AB and Logistea AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistea AB Series and K Fast 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 K Fast Holding AB are associated (or correlated) with Logistea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistea AB Series has no effect on the direction of K Fast i.e., K Fast and Logistea go up and down completely randomly.

Pair Corralation between K Fast and Logistea

Assuming the 90 days trading horizon K Fast Holding AB is expected to under-perform the Logistea. But the stock apears to be less risky and, when comparing its historical volatility, K Fast Holding AB is 1.04 times less risky than Logistea. The stock trades about -0.12 of its potential returns per unit of risk. The Logistea AB Series is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,616  in Logistea AB Series on August 31, 2024 and sell it today you would lose (34.00) from holding Logistea AB Series or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

K Fast Holding AB  vs.  Logistea AB Series

K Fast Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K Fast Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Logistea AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logistea AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Logistea is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with K Fast and Logistea

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

The idea behind K Fast Holding AB and Logistea AB Series 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.