Correlation Between Seche Environnement and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Seche Environnement 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 Seche Environnement and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Kinnevik Investment AB, you can compare the effects of market volatilities on Seche Environnement 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 Seche Environnement with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Kinnevik Investment.
Diversification Opportunities for Seche Environnement and Kinnevik Investment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seche and Kinnevik is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Seche Environnement 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 Seche Environnement SA 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 Seche Environnement i.e., Seche Environnement and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Seche Environnement and Kinnevik Investment
Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 0.79 times more return on investment than Kinnevik Investment. However, Seche Environnement SA is 1.27 times less risky than Kinnevik Investment. It trades about 0.01 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.05 per unit of risk. If you would invest 8,477 in Seche Environnement SA on August 29, 2024 and sell it today you would lose (247.00) from holding Seche Environnement SA or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seche Environnement SA vs. Kinnevik Investment AB
Performance |
| Timeline |
| Seche Environnement |
| Kinnevik Investment |
Seche Environnement and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Kinnevik Investment
The main advantage of trading using opposite Seche Environnement and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement 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.| Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Samsung Electronics Co | Seche Environnement vs. Hyundai Motor | Seche Environnement vs. Toyota Motor Corp |
| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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