Correlation Between AMG Advanced and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Kinnevik Investment AB, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Kinnevik Investment.
Diversification Opportunities for AMG Advanced and Kinnevik Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and Kinnevik is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and Kinnevik Investment go up and down completely randomly.
Pair Corralation between AMG Advanced and Kinnevik Investment
Assuming the 90 days trading horizon AMG Advanced is expected to generate 2.1 times less return on investment than Kinnevik Investment. In addition to that, AMG Advanced is 1.07 times more volatile than Kinnevik Investment AB. It trades about 0.04 of its total potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.08 per unit of volatility. If you would invest 7,287 in Kinnevik Investment AB on September 12, 2024 and sell it today you would earn a total of 740.00 from holding Kinnevik Investment AB or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Kinnevik Investment AB
Performance |
| Timeline |
| AMG Advanced Metallu |
| Kinnevik Investment |
AMG Advanced and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Kinnevik Investment
The main advantage of trading using opposite AMG Advanced and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.| AMG Advanced vs. Jacquet Metal Service | AMG Advanced vs. Edita Food Industries | AMG Advanced vs. Roebuck Food Group | AMG Advanced vs. Golden Metal Resources |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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