Correlation Between Kinnevik Investment and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and CATLIN 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 CATLIN 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 CATLIN GROUP , you can compare the effects of market volatilities on Kinnevik Investment and CATLIN 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and CATLIN GROUP.
Diversification Opportunities for Kinnevik Investment and CATLIN GROUP
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and CATLIN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Kinnevik Investment and CATLIN GROUP
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the CATLIN GROUP. In addition to that, Kinnevik Investment is 1.42 times more volatile than CATLIN GROUP . It trades about -0.05 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about 0.05 per unit of volatility. If you would invest 6,900 in CATLIN GROUP on September 23, 2024 and sell it today you would earn a total of 2,500 from holding CATLIN GROUP or generate 36.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.82% |
| Values | Daily Returns |
Kinnevik Investment AB vs. CATLIN GROUP
Performance |
| Timeline |
| Kinnevik Investment |
| CATLIN GROUP |
Kinnevik Investment and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and CATLIN GROUP
The main advantage of trading using opposite Kinnevik Investment and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, CATLIN 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Kinnevik Investment vs. Discover Financial Services | Kinnevik Investment vs. MT Bank Corp | Kinnevik Investment vs. St Galler Kantonalbank | Kinnevik Investment vs. Tatton Asset Management |
| CATLIN GROUP vs. Vitec Software Group | CATLIN GROUP vs. Auction Technology Group | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Take Two Interactive Software |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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