Correlation Between NCAB and KlaraBo Sverige

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

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

Diversification Opportunities for NCAB and KlaraBo Sverige

-0.59

Correlation Coefficient

NCAB  KlaraBo Sverige

Excellent diversification

The 3 months correlation between NCAB and KlaraBo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NCAB Group and KlaraBo Sverige AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KlaraBo Sverige AB and NCAB 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 NCAB Group are associated (or correlated) with KlaraBo Sverige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KlaraBo Sverige AB has no effect on the direction of NCAB i.e., NCAB and KlaraBo Sverige go up and down completely randomly.

Pair Corralation between NCAB and KlaraBo Sverige

Assuming the 90 days trading horizon NCAB Group is expected to under-perform the KlaraBo Sverige. In addition to that, NCAB is 1.37 times more volatile than KlaraBo Sverige AB. It trades about -0.14 of its total potential returns per unit of risk. KlaraBo Sverige AB is currently generating about -0.1 per unit of volatility. If you would invest  1,824  in KlaraBo Sverige AB on December 1, 2024 and sell it today you would lose (190.00) from holding KlaraBo Sverige AB or give up 10.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

NCAB Group  vs.  KlaraBo Sverige AB

NCAB Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days NCAB Group 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KlaraBo Sverige AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days KlaraBo Sverige AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with NCAB and KlaraBo Sverige

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

The idea behind NCAB Group and KlaraBo Sverige 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.