Correlation Between Kinnevik Investment and Made Tech
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Kinnevik Investment and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Made Tech.
Diversification Opportunities for Kinnevik Investment and Made Tech
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Made is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Made Tech go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Made Tech
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Made Tech. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.78 times less risky than Made Tech. The stock trades about -0.04 of its potential returns per unit of risk. The Made Tech Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,850 in Made Tech Group on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Made Tech Group or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Made Tech Group
Performance |
| Timeline |
| Kinnevik Investment |
| Made Tech Group |
Kinnevik Investment and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Made Tech
The main advantage of trading using opposite Kinnevik Investment and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech'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 |
| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Toyota Motor Corp | Made Tech vs. Reliance Industries Ltd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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