Correlation Between Kinnevik Investment and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Telenor ASA 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 Kinnevik Investment and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinnevik Investment AB and Telenor ASA, you can compare the effects of market volatilities on Kinnevik Investment and Telenor ASA 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 Kinnevik Investment with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Telenor ASA.
Diversification Opportunities for Kinnevik Investment and Telenor ASA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Telenor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and Kinnevik Investment 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 Kinnevik Investment AB are associated (or correlated) with Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Telenor ASA go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Telenor ASA
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Telenor ASA. In addition to that, Kinnevik Investment is 2.34 times more volatile than Telenor ASA. It trades about -0.04 of its total potential returns per unit of risk. Telenor ASA is currently generating about 0.06 per unit of volatility. If you would invest 11,449 in Telenor ASA on September 3, 2024 and sell it today you would earn a total of 1,636 from holding Telenor ASA or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Telenor ASA
Performance |
| Timeline |
| Kinnevik Investment |
| Telenor ASA |
Kinnevik Investment and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Telenor ASA
The main advantage of trading using opposite Kinnevik Investment and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Kinnevik Investment vs. Catalyst Media Group | Kinnevik Investment vs. CATLIN GROUP | Kinnevik Investment vs. Magnora ASA | Kinnevik Investment vs. RTW Venture Fund |
| Telenor ASA vs. Federal Realty Investment | Telenor ASA vs. Kinnevik Investment AB | Telenor ASA vs. Vulcan Materials Co | Telenor ASA vs. Taylor Maritime Investments |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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