Correlation Between Brd Klee and SKAKO AS

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

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

Diversification Opportunities for Brd Klee and SKAKO AS

-0.24

Correlation Coefficient

Brd Klee  SKAKO AS

Very good diversification

The 3 months correlation between Brd and SKAKO is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Brd Klee AS and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO AS and Brd Klee 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 Brd Klee AS are associated (or correlated) with SKAKO AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAKO AS has no effect on the direction of Brd Klee i.e., Brd Klee and SKAKO AS go up and down completely randomly.

Pair Corralation between Brd Klee and SKAKO AS

Assuming the 90 days trading horizon Brd Klee is expected to generate 7.51 times less return on investment than SKAKO AS. In addition to that, Brd Klee is 1.17 times more volatile than SKAKO AS. It trades about 0.01 of its total potential returns per unit of risk. SKAKO AS is currently generating about 0.11 per unit of volatility. If you would invest  6,773  in SKAKO AS on January 24, 2024 and sell it today you would earn a total of  1,427  from holding SKAKO AS or generate 21.07% return on investment over 90 days.

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

Brd Klee AS  vs.  SKAKO AS

Brd Klee AS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brd Klee AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Brd Klee is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SKAKO AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SKAKO AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SKAKO AS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brd Klee and SKAKO AS

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

The idea behind Brd Klee AS and SKAKO AS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.