Correlation Between Kinnevik Investment and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and CVR Energy 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 CVR Energy 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 CVR Energy, you can compare the effects of market volatilities on Kinnevik Investment and CVR Energy 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 CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and CVR Energy.
Diversification Opportunities for Kinnevik Investment and CVR Energy
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and CVR is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy 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 CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and CVR Energy go up and down completely randomly.
Pair Corralation between Kinnevik Investment and CVR Energy
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the CVR Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.36 times less risky than CVR Energy. The stock trades about -0.04 of its potential returns per unit of risk. The CVR Energy is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,908 in CVR Energy on November 19, 2024 and sell it today you would lose (1,045) from holding CVR Energy or give up 35.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.71% |
| Values | Daily Returns |
Kinnevik Investment AB vs. CVR Energy
Performance |
| Timeline |
| Kinnevik Investment |
| CVR Energy |
Kinnevik Investment and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and CVR Energy
The main advantage of trading using opposite Kinnevik Investment and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Kinnevik Investment vs. Molson Coors Beverage | Kinnevik Investment vs. Ryanair Holdings plc | Kinnevik Investment vs. Sabre Insurance Group | Kinnevik Investment vs. Wizz Air Holdings |
| CVR Energy vs. Tyson Foods Cl | CVR Energy vs. Supermarket Income REIT | CVR Energy vs. Axfood AB | CVR Energy vs. Bell Food Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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