Correlation Between Kinnevik Investment and Herald Investment
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Herald Investment 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 Herald Investment 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 Herald Investment Trust, you can compare the effects of market volatilities on Kinnevik Investment and Herald Investment 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 Herald Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Herald Investment.
Diversification Opportunities for Kinnevik Investment and Herald Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and Herald is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald Investment Trust 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Herald Investment go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Herald Investment
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Herald Investment. In addition to that, Kinnevik Investment is 1.61 times more volatile than Herald Investment Trust. It trades about -0.04 of its total potential returns per unit of risk. Herald Investment Trust is currently generating about 0.37 per unit of volatility. If you would invest 211,000 in Herald Investment Trust on August 28, 2024 and sell it today you would earn a total of 22,000 from holding Herald Investment Trust or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Herald Investment Trust
Performance |
| Timeline |
| Kinnevik Investment |
| Herald Investment Trust |
Kinnevik Investment and Herald Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Herald Investment
The main advantage of trading using opposite Kinnevik Investment and Herald Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Herald Investment 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 Herald Investment will offset losses from the drop in Herald Investment's long position.| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor Corp |
| Herald Investment vs. Catalyst Media Group | Herald Investment vs. Oncimmune Holdings plc | Herald Investment vs. Invesco Health Care | Herald Investment vs. Coor Service Management |
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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