Correlation Between Kinnevik Investment and Ameren Corp
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Ameren Corp 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 Ameren Corp 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 Ameren Corp, you can compare the effects of market volatilities on Kinnevik Investment and Ameren Corp 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 Ameren Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Ameren Corp.
Diversification Opportunities for Kinnevik Investment and Ameren Corp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Ameren is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Ameren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Corp 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 Ameren Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Corp has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Ameren Corp go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Ameren Corp
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 2.27 times more return on investment than Ameren Corp. However, Kinnevik Investment is 2.27 times more volatile than Ameren Corp. It trades about 0.06 of its potential returns per unit of risk. Ameren Corp is currently generating about -0.04 per unit of risk. If you would invest 7,802 in Kinnevik Investment AB on September 12, 2024 and sell it today you would earn a total of 177.00 from holding Kinnevik Investment AB or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Ameren Corp
Performance |
| Timeline |
| Kinnevik Investment |
| Ameren Corp |
Kinnevik Investment and Ameren Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Ameren Corp
The main advantage of trading using opposite Kinnevik Investment and Ameren Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Ameren Corp 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 Ameren Corp will offset losses from the drop in Ameren Corp'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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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