Correlation Between Kambi Group and Zaptec AS

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

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

Diversification Opportunities for Kambi Group and Zaptec AS

0.79

Correlation Coefficient

Kambi Group  Zaptec AS

Poor diversification

The 3 months correlation between Kambi and Zaptec is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kambi Group PLC and Zaptec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaptec AS and Kambi 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 Kambi Group PLC are associated (or correlated) with Zaptec AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaptec AS has no effect on the direction of Kambi Group i.e., Kambi Group and Zaptec AS go up and down completely randomly.

Pair Corralation between Kambi Group and Zaptec AS

Assuming the 90 days trading horizon Kambi Group PLC is expected to under-perform the Zaptec AS. But the stock apears to be less risky and, when comparing its historical volatility, Kambi Group PLC is 1.57 times less risky than Zaptec AS. The stock trades about -0.14 of its potential returns per unit of risk. The Zaptec AS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,135  in Zaptec AS on September 13, 2024 and sell it today you would lose (232.00) from holding Zaptec AS or give up 20.44% of portfolio value over 90 days.

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

Kambi Group PLC  vs.  Zaptec AS

Kambi Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kambi Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Zaptec AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zaptec AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kambi Group and Zaptec AS

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

The idea behind Kambi Group PLC and Zaptec 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.