Correlation Between Kinnevik Investment and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and SBM Offshore 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 SBM Offshore 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 SBM Offshore NV, you can compare the effects of market volatilities on Kinnevik Investment and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and SBM Offshore.
Diversification Opportunities for Kinnevik Investment and SBM Offshore
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and SBM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and SBM Offshore go up and down completely randomly.
Pair Corralation between Kinnevik Investment and SBM Offshore
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.95 times more return on investment than SBM Offshore. However, Kinnevik Investment AB is 1.05 times less risky than SBM Offshore. It trades about 0.29 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.22 per unit of risk. If you would invest 7,279 in Kinnevik Investment AB on October 22, 2024 and sell it today you would earn a total of 668.00 from holding Kinnevik Investment AB or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Kinnevik Investment AB vs. SBM Offshore NV
Performance |
| Timeline |
| Kinnevik Investment |
| SBM Offshore NV |
Kinnevik Investment and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and SBM Offshore
The main advantage of trading using opposite Kinnevik Investment and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Kinnevik Investment vs. Uniper SE | Kinnevik Investment vs. Mulberry Group PLC | Kinnevik Investment vs. London Security Plc | Kinnevik Investment vs. Triad Group PLC |
| SBM Offshore vs. Zegona Communications Plc | SBM Offshore vs. Mobius Investment Trust | SBM Offshore vs. Kinnevik Investment AB | SBM Offshore vs. Livermore Investments 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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