Correlation Between CodeMill and Klimator

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Can any of the company-specific risk be diversified away by investing in both CodeMill and Klimator 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 CodeMill and Klimator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CodeMill AB and Klimator AB, you can compare the effects of market volatilities on CodeMill and Klimator 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 CodeMill with a short position of Klimator. Check out your portfolio center. Please also check ongoing floating volatility patterns of CodeMill and Klimator.

Diversification Opportunities for CodeMill and Klimator

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between CodeMill and Klimator is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CodeMill AB and Klimator AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klimator AB and CodeMill 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 CodeMill AB are associated (or correlated) with Klimator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klimator AB has no effect on the direction of CodeMill i.e., CodeMill and Klimator go up and down completely randomly.

Pair Corralation between CodeMill and Klimator

Assuming the 90 days trading horizon CodeMill AB is expected to under-perform the Klimator. But the stock apears to be less risky and, when comparing its historical volatility, CodeMill AB is 1.89 times less risky than Klimator. The stock trades about -0.08 of its potential returns per unit of risk. The Klimator AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  239.00  in Klimator AB on April 20, 2025 and sell it today you would earn a total of  9.00  from holding Klimator AB or generate 3.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CodeMill AB  vs.  Klimator AB

 Performance 
       Timeline  
CodeMill AB 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CodeMill AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CodeMill unveiled solid returns over the last few months and may actually be approaching a breakup point.
Klimator AB 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Klimator AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Klimator may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CodeMill and Klimator Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CodeMill and Klimator

The main advantage of trading using opposite CodeMill and Klimator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CodeMill position performs unexpectedly, Klimator 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 Klimator will offset losses from the drop in Klimator's long position.
The idea behind CodeMill AB and Klimator 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.
Check out your portfolio center.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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