Correlation Between Kinnevik Investment and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and CleanTech Lithium 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 CleanTech Lithium 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 CleanTech Lithium plc, you can compare the effects of market volatilities on Kinnevik Investment and CleanTech Lithium 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 CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and CleanTech Lithium.
Diversification Opportunities for Kinnevik Investment and CleanTech Lithium
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinnevik and CleanTech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium plc 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 CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Kinnevik Investment and CleanTech Lithium
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.48 times more return on investment than CleanTech Lithium. However, Kinnevik Investment AB is 2.08 times less risky than CleanTech Lithium. It trades about 0.28 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about -0.01 per unit of risk. If you would invest 7,344 in Kinnevik Investment AB on September 13, 2024 and sell it today you would earn a total of 675.00 from holding Kinnevik Investment AB or generate 9.19% 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. CleanTech Lithium plc
Performance |
| Timeline |
| Kinnevik Investment |
| CleanTech Lithium plc |
Kinnevik Investment and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and CleanTech Lithium
The main advantage of trading using opposite Kinnevik Investment and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Kinnevik Investment vs. Caledonia Mining | Kinnevik Investment vs. Lundin Mining Corp | Kinnevik Investment vs. Coeur Mining | Kinnevik Investment vs. Universal Music Group |
| CleanTech Lithium vs. Hansa Investment | CleanTech Lithium vs. FC Investment Trust | CleanTech Lithium vs. Fevertree Drinks Plc | CleanTech Lithium vs. Edita Food Industries |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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