Correlation Between Klimator and Opter AB

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

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

Diversification Opportunities for Klimator and Opter AB

0.37

Correlation Coefficient

Klimator  Opter AB

Weak diversification

The 3 months correlation between Klimator and Opter is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Klimator AB and Opter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opter AB and Klimator 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 Klimator AB are associated (or correlated) with Opter AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opter AB has no effect on the direction of Klimator i.e., Klimator and Opter AB go up and down completely randomly.

Pair Corralation between Klimator and Opter AB

Assuming the 90 days trading horizon Klimator AB is expected to generate 2.0 times more return on investment than Opter AB. However, Klimator is 2.0 times more volatile than Opter AB. It trades about 0.05 of its potential returns per unit of risk. Opter AB is currently generating about 0.08 per unit of risk. If you would invest  233.00  in Klimator AB on April 20, 2025 and sell it today you would earn a total of  15.00  from holding Klimator AB or generate 6.44% return on investment over 90 days.

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

Klimator AB  vs.  Opter AB

Klimator AB

Risk-Adjusted Performance

Insignificant

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.

Opter AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Opter AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Opter AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Klimator and Opter AB

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

The idea behind Klimator AB and Opter 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.