Correlation Between Kjell Group and Thule Group

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

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

Diversification Opportunities for Kjell Group and Thule Group

-0.63

Correlation Coefficient

Kjell Group  Thule Group

Excellent diversification

The 3 months correlation between Kjell and Thule is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kjell Group AB and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group AB and Kjell 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 Kjell Group AB are associated (or correlated) with Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of Kjell Group i.e., Kjell Group and Thule Group go up and down completely randomly.

Pair Corralation between Kjell Group and Thule Group

Assuming the 90 days trading horizon Kjell Group AB is expected to under-perform the Thule Group. In addition to that, Kjell Group is 6.2 times more volatile than Thule Group AB. It trades about -0.12 of its total potential returns per unit of risk. Thule Group AB is currently generating about -0.25 per unit of volatility. If you would invest  36,700  in Thule Group AB on October 5, 2024 and sell it today you would lose (2,160) from holding Thule Group AB or give up 5.89% of portfolio value over 90 days.

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

Kjell Group AB  vs.  Thule Group AB

Kjell Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kjell Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Thule Group AB

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Kjell Group and Thule Group

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

The idea behind Kjell Group AB and Thule 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.