Correlation Between Kinnevik Investment and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and International Biotechnology 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 International Biotechnology 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 International Biotechnology Trust, you can compare the effects of market volatilities on Kinnevik Investment and International Biotechnology 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 International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and International Biotechnology.
Diversification Opportunities for Kinnevik Investment and International Biotechnology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and International is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology 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 International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and International Biotechnology go up and down completely randomly.
Pair Corralation between Kinnevik Investment and International Biotechnology
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the International Biotechnology. In addition to that, Kinnevik Investment is 1.82 times more volatile than International Biotechnology Trust. It trades about -0.05 of its total potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.02 per unit of volatility. If you would invest 63,669 in International Biotechnology Trust on October 11, 2024 and sell it today you would earn a total of 6,131 from holding International Biotechnology Trust or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Kinnevik Investment AB vs. International Biotechnology Tr
Performance |
| Timeline |
| Kinnevik Investment |
| International Biotechnology |
Kinnevik Investment and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and International Biotechnology
The main advantage of trading using opposite Kinnevik Investment and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| Kinnevik Investment vs. Walmart | Kinnevik Investment vs. BYD Co | Kinnevik Investment vs. Volkswagen AG | Kinnevik Investment vs. Volkswagen AG Non Vtg |
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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