Correlation Between Kinnevik Investment and Universal Health
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Universal Health 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 Universal Health 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 Universal Health Services, you can compare the effects of market volatilities on Kinnevik Investment and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Universal Health.
Diversification Opportunities for Kinnevik Investment and Universal Health
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and Universal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Universal Health go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Universal Health
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Universal Health. In addition to that, Kinnevik Investment is 1.16 times more volatile than Universal Health Services. It trades about -0.04 of its total potential returns per unit of risk. Universal Health Services is currently generating about 0.04 per unit of volatility. If you would invest 14,847 in Universal Health Services on November 6, 2024 and sell it today you would earn a total of 4,088 from holding Universal Health Services or generate 27.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.28% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Universal Health Services
Performance |
| Timeline |
| Kinnevik Investment |
| Universal Health Services |
Kinnevik Investment and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Universal Health
The main advantage of trading using opposite Kinnevik Investment and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Kinnevik Investment vs. Grieg Seafood | Kinnevik Investment vs. Hilton Food Group | Kinnevik Investment vs. Software Circle plc | Kinnevik Investment vs. Axway Software SA |
| Universal Health vs. Europa Metals | Universal Health vs. Capital Metals PLC | Universal Health vs. Take Two Interactive Software | Universal Health vs. Power Metal Resources |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |