Correlation Between Kinnevik Investment and Erste Group
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on Kinnevik Investment and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Erste Group.
Diversification Opportunities for Kinnevik Investment and Erste Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinnevik and Erste is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Erste Group go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Erste Group
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 2.07 times more return on investment than Erste Group. However, Kinnevik Investment is 2.07 times more volatile than Erste Group Bank. It trades about 0.29 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.16 per unit of risk. If you would invest 7,655 in Kinnevik Investment AB on November 3, 2024 and sell it today you would earn a total of 1,140 from holding Kinnevik Investment AB or generate 14.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Erste Group Bank
Performance |
| Timeline |
| Kinnevik Investment |
| Erste Group Bank |
Kinnevik Investment and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Erste Group
The main advantage of trading using opposite Kinnevik Investment and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Kinnevik Investment vs. FC Investment Trust | Kinnevik Investment vs. Diversified Energy | Kinnevik Investment vs. Software Circle plc | Kinnevik Investment vs. Lowland Investment Co |
| Erste Group vs. OneSavings Bank PLC | Erste Group vs. Eastinco Mining Exploration | Erste Group vs. Chrysalis Investments | Erste Group vs. AMG Advanced Metallurgical |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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