Correlation Between Alcadon Group and Goodbye Kansas

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

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

Diversification Opportunities for Alcadon Group and Goodbye Kansas

-0.39

Correlation Coefficient

Alcadon Group  Goodbye Kansas

Very good diversification

The 3 months correlation between Alcadon and Goodbye is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alcadon Group AB and Goodbye Kansas Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodbye Kansas Group and Alcadon 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 Alcadon Group AB are associated (or correlated) with Goodbye Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodbye Kansas Group has no effect on the direction of Alcadon Group i.e., Alcadon Group and Goodbye Kansas go up and down completely randomly.

Pair Corralation between Alcadon Group and Goodbye Kansas

Assuming the 90 days trading horizon Alcadon Group AB is expected to under-perform the Goodbye Kansas. But the stock apears to be less risky and, when comparing its historical volatility, Alcadon Group AB is 2.22 times less risky than Goodbye Kansas. The stock trades about -0.18 of its potential returns per unit of risk. The Goodbye Kansas Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Goodbye Kansas Group on September 15, 2024 and sell it today you would earn a total of  23.00  from holding Goodbye Kansas Group or generate 19.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Alcadon Group AB  vs.  Goodbye Kansas Group

Alcadon Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Goodbye Kansas Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goodbye Kansas Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Goodbye Kansas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alcadon Group and Goodbye Kansas

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

The idea behind Alcadon Group AB and Goodbye Kansas Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.