Correlation Between MT Bank and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both MT Bank and Kinnevik Investment 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 MT Bank and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank Corp and Kinnevik Investment AB, you can compare the effects of market volatilities on MT Bank and Kinnevik Investment 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 MT Bank with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Kinnevik Investment.
Diversification Opportunities for MT Bank and Kinnevik Investment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0JW2 and Kinnevik is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and MT Bank 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 MT Bank Corp are associated (or correlated) with Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of MT Bank i.e., MT Bank and Kinnevik Investment go up and down completely randomly.
Pair Corralation between MT Bank and Kinnevik Investment
Assuming the 90 days trading horizon MT Bank Corp is expected to under-perform the Kinnevik Investment. But the stock apears to be less risky and, when comparing its historical volatility, MT Bank Corp is 1.1 times less risky than Kinnevik Investment. The stock trades about -0.56 of its potential returns per unit of risk. The Kinnevik Investment AB is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 7,576 in Kinnevik Investment AB on September 24, 2024 and sell it today you would lose (280.00) from holding Kinnevik Investment AB or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MT Bank Corp vs. Kinnevik Investment AB
Performance |
| Timeline |
| MT Bank Corp |
| Kinnevik Investment |
MT Bank and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Kinnevik Investment
The main advantage of trading using opposite MT Bank and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| MT Bank vs. Polar Capital Technology | MT Bank vs. American Homes 4 | MT Bank vs. bet at home AG | MT Bank vs. Home Depot |
| Kinnevik Investment vs. Discover Financial Services | Kinnevik Investment vs. MT Bank Corp | Kinnevik Investment vs. St Galler Kantonalbank | Kinnevik Investment vs. Tatton Asset Management |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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