Correlation Between SPORTING and KION Group

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

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

Diversification Opportunities for SPORTING and KION Group

0.49

Correlation Coefficient

SPORTING  KION Group

Very weak diversification

The 3 months correlation between SPORTING and KION is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG and SPORTING 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 SPORTING are associated (or correlated) with KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of SPORTING i.e., SPORTING and KION Group go up and down completely randomly.

Pair Corralation between SPORTING and KION Group

Assuming the 90 days trading horizon SPORTING is expected to generate 4.43 times more return on investment than KION Group. However, SPORTING is 4.43 times more volatile than KION Group AG. It trades about -0.1 of its potential returns per unit of risk. KION Group AG is currently generating about -0.51 per unit of risk. If you would invest  106.00  in SPORTING on October 8, 2024 and sell it today you would lose (14.00) from holding SPORTING or give up 13.21% of portfolio value over 90 days.

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

SPORTING  vs.  KION Group AG

SPORTING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPORTING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

KION Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KION Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SPORTING and KION Group

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

The idea behind SPORTING and KION Group AG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.