Correlation Between Kinnevik Investment and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Leroy Seafood 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 Leroy Seafood 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 Leroy Seafood Group, you can compare the effects of market volatilities on Kinnevik Investment and Leroy Seafood 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 Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Leroy Seafood.
Diversification Opportunities for Kinnevik Investment and Leroy Seafood
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Leroy is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group 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 Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Leroy Seafood go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Leroy Seafood
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Leroy Seafood. In addition to that, Kinnevik Investment is 1.21 times more volatile than Leroy Seafood Group. It trades about -0.04 of its total potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.01 per unit of volatility. If you would invest 4,971 in Leroy Seafood Group on September 12, 2024 and sell it today you would earn a total of 167.00 from holding Leroy Seafood Group or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.61% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Leroy Seafood Group
Performance |
| Timeline |
| Kinnevik Investment |
| Leroy Seafood Group |
Kinnevik Investment and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Leroy Seafood
The main advantage of trading using opposite Kinnevik Investment and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Kinnevik Investment vs. Hong Kong Land | Kinnevik Investment vs. Neometals | Kinnevik Investment vs. Coor Service Management | Kinnevik Investment vs. Fidelity Sustainable USD |
| Leroy Seafood vs. Hong Kong Land | Leroy Seafood vs. Neometals | Leroy Seafood vs. Coor Service Management | Leroy Seafood vs. Fidelity Sustainable USD |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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