Correlation Between Kinnevik Investment and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Naturhouse 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 Naturhouse 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 Naturhouse Health SA, you can compare the effects of market volatilities on Kinnevik Investment and Naturhouse 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Naturhouse Health.
Diversification Opportunities for Kinnevik Investment and Naturhouse Health
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and Naturhouse is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Naturhouse Health go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Naturhouse Health
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Naturhouse Health. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.95 times less risky than Naturhouse Health. The stock trades about -0.05 of its potential returns per unit of risk. The Naturhouse Health SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Naturhouse Health SA on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Naturhouse Health SA or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.39% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Naturhouse Health SA
Performance |
| Timeline |
| Kinnevik Investment |
| Naturhouse Health |
Kinnevik Investment and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Naturhouse Health
The main advantage of trading using opposite Kinnevik Investment and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Naturhouse 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Kinnevik Investment vs. Deltex Medical Group | Kinnevik Investment vs. Futura Medical | Kinnevik Investment vs. Spirent Communications plc | Kinnevik Investment vs. Aeorema Communications Plc |
| Naturhouse Health vs. Fevertree Drinks Plc | Naturhouse Health vs. Cairn Homes PLC | Naturhouse Health vs. Kinnevik Investment AB | Naturhouse Health 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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