Correlation Between Unlimited Travel and KebNi AB

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

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

Diversification Opportunities for Unlimited Travel and KebNi AB

-0.73

Correlation Coefficient

Unlimited Travel  KebNi AB

Pay attention - limited upside

The 3 months correlation between Unlimited and KebNi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Unlimited Travel Group and KebNi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KebNi AB and Unlimited Travel 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 Unlimited Travel Group are associated (or correlated) with KebNi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KebNi AB has no effect on the direction of Unlimited Travel i.e., Unlimited Travel and KebNi AB go up and down completely randomly.

Pair Corralation between Unlimited Travel and KebNi AB

Assuming the 90 days trading horizon Unlimited Travel Group is expected to under-perform the KebNi AB. But the stock apears to be less risky and, when comparing its historical volatility, Unlimited Travel Group is 2.61 times less risky than KebNi AB. The stock trades about -0.09 of its potential returns per unit of risk. The KebNi AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  94.00  in KebNi AB on September 26, 2024 and sell it today you would earn a total of  14.00  from holding KebNi AB or generate 14.89% return on investment over 90 days.

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

Unlimited Travel Group  vs.  KebNi AB

Unlimited Travel

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Unlimited Travel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Unlimited Travel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

KebNi AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KebNi 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 Unlimited Travel and KebNi AB

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

The idea behind Unlimited Travel Group and KebNi 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 Global Correlations module to find global opportunities by holding instruments from different markets.