Correlation Between Kinnevik Investment and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Gaming Realms 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 Gaming Realms 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 Gaming Realms plc, you can compare the effects of market volatilities on Kinnevik Investment and Gaming Realms 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 Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Gaming Realms.
Diversification Opportunities for Kinnevik Investment and Gaming Realms
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and Gaming is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms 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 Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Gaming Realms go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Gaming Realms
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Gaming Realms. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.2 times less risky than Gaming Realms. The stock trades about -0.11 of its potential returns per unit of risk. The Gaming Realms plc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,665 in Gaming Realms plc on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Gaming Realms plc or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Gaming Realms plc
Performance |
| Timeline |
| Kinnevik Investment |
| Gaming Realms plc |
Kinnevik Investment and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Gaming Realms
The main advantage of trading using opposite Kinnevik Investment and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' long position.| Kinnevik Investment vs. Made Tech Group | Kinnevik Investment vs. MT Bank Corp | Kinnevik Investment vs. Albion Technology General | Kinnevik Investment vs. Komercni Banka |
| Gaming Realms vs. Tungsten West PLC | Gaming Realms vs. Argo Group Limited | Gaming Realms vs. Hardide PLC | Gaming Realms vs. Gfinity PLC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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