Correlation Between Kinnevik Investment and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Liontrust Asset 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 Liontrust Asset 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 Liontrust Asset Management, you can compare the effects of market volatilities on Kinnevik Investment and Liontrust Asset 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Liontrust Asset.
Diversification Opportunities for Kinnevik Investment and Liontrust Asset
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinnevik and Liontrust is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Liontrust Asset go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Liontrust Asset
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.91 times more return on investment than Liontrust Asset. However, Kinnevik Investment AB is 1.1 times less risky than Liontrust Asset. It trades about 0.08 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.05 per unit of risk. If you would invest 7,287 in Kinnevik Investment AB on September 12, 2024 and sell it today you would earn a total of 740.00 from holding Kinnevik Investment AB or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Liontrust Asset Management
Performance |
| Timeline |
| Kinnevik Investment |
| Liontrust Asset Mana |
Kinnevik Investment and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Liontrust Asset
The main advantage of trading using opposite Kinnevik Investment and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| Kinnevik Investment vs. Premier Foods PLC | Kinnevik Investment vs. Prudential Financial | Kinnevik Investment vs. Ameriprise Financial | Kinnevik Investment vs. Komercni Banka |
| Liontrust Asset vs. Tyson Foods Cl | Liontrust Asset vs. Sligro Food Group | Liontrust Asset vs. Premier Foods PLC | Liontrust Asset vs. Hilton Food Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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