Correlation Between Kinnevik Investment and Dotdigital Group
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Dotdigital 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 Dotdigital 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 Dotdigital Group Plc, you can compare the effects of market volatilities on Kinnevik Investment and Dotdigital 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 Dotdigital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Dotdigital Group.
Diversification Opportunities for Kinnevik Investment and Dotdigital Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and Dotdigital is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Dotdigital Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dotdigital Group 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 Dotdigital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dotdigital Group Plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Dotdigital Group go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Dotdigital Group
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.58 times more return on investment than Dotdigital Group. However, Kinnevik Investment AB is 1.74 times less risky than Dotdigital Group. It trades about 0.17 of its potential returns per unit of risk. Dotdigital Group Plc is currently generating about -0.12 per unit of risk. If you would invest 7,406 in Kinnevik Investment AB on September 15, 2024 and sell it today you would earn a total of 412.00 from holding Kinnevik Investment AB or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Dotdigital Group Plc
Performance |
| Timeline |
| Kinnevik Investment |
| Dotdigital Group Plc |
Kinnevik Investment and Dotdigital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Dotdigital Group
The main advantage of trading using opposite Kinnevik Investment and Dotdigital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Dotdigital 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 Dotdigital Group will offset losses from the drop in Dotdigital Group's long position.| Kinnevik Investment vs. Impax Environmental Markets | Kinnevik Investment vs. JD Sports Fashion | Kinnevik Investment vs. Empire Metals Limited | Kinnevik Investment vs. Europa Metals |
| Dotdigital Group vs. Herald Investment Trust | Dotdigital Group vs. Kinnevik Investment AB | Dotdigital Group vs. Monks Investment Trust | Dotdigital Group vs. Diversified Energy |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |