Correlation Between Kinnevik Investment and Technicolor
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Technicolor 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 Technicolor 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 Technicolor, you can compare the effects of market volatilities on Kinnevik Investment and Technicolor 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 Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Technicolor.
Diversification Opportunities for Kinnevik Investment and Technicolor
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Technicolor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor 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 Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Technicolor go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Technicolor
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.65 times more return on investment than Technicolor. However, Kinnevik Investment AB is 1.53 times less risky than Technicolor. It trades about 0.23 of its potential returns per unit of risk. Technicolor is currently generating about 0.01 per unit of risk. If you would invest 7,384 in Kinnevik Investment AB on October 30, 2024 and sell it today you would earn a total of 577.00 from holding Kinnevik Investment AB or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Technicolor
Performance |
| Timeline |
| Kinnevik Investment |
| Technicolor |
Kinnevik Investment and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Technicolor
The main advantage of trading using opposite Kinnevik Investment and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Kinnevik Investment vs. Pentair PLC | Kinnevik Investment vs. Finnair Oyj | Kinnevik Investment vs. Charter Communications Cl | Kinnevik Investment vs. Universal Display Corp |
| Technicolor vs. Berkshire Hathaway | Technicolor vs. Samsung Electronics Co | Technicolor vs. Samsung Electronics Co | Technicolor vs. Chocoladefabriken Lindt Spruengli |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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