Correlation Between Image Systems and Kancera AB

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

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

Diversification Opportunities for Image Systems and Kancera AB

-0.2

Correlation Coefficient

Image Systems  Kancera AB

Good diversification

The 3 months correlation between Image and Kancera is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Image Systems AB and Kancera AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kancera AB and Image Systems 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 Image Systems AB are associated (or correlated) with Kancera AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kancera AB has no effect on the direction of Image Systems i.e., Image Systems and Kancera AB go up and down completely randomly.

Pair Corralation between Image Systems and Kancera AB

Assuming the 90 days horizon Image Systems AB is expected to under-perform the Kancera AB. But the stock apears to be less risky and, when comparing its historical volatility, Image Systems AB is 1.89 times less risky than Kancera AB. The stock trades about -0.03 of its potential returns per unit of risk. The Kancera AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  122.00  in Kancera AB on April 24, 2025 and sell it today you would earn a total of  31.00  from holding Kancera AB or generate 25.41% return on investment over 90 days.

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

Image Systems AB  vs.  Kancera AB

Image Systems AB

Risk-Adjusted Performance

Very Weak

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

Kancera AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kancera AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kancera AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Image Systems and Kancera AB

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

The idea behind Image Systems AB and Kancera 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.