Correlation Between Kinnevik Investment and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on Kinnevik Investment and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Metals Exploration.
Diversification Opportunities for Kinnevik Investment and Metals Exploration
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and Metals is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Metals Exploration go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Metals Exploration
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.46 times more return on investment than Metals Exploration. However, Kinnevik Investment AB is 2.18 times less risky than Metals Exploration. It trades about 0.29 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about 0.08 per unit of risk. If you would invest 7,279 in Kinnevik Investment AB on October 24, 2024 and sell it today you would earn a total of 701.00 from holding Kinnevik Investment AB or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Metals Exploration Plc
Performance |
| Timeline |
| Kinnevik Investment |
| Metals Exploration Plc |
Kinnevik Investment and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Metals Exploration
The main advantage of trading using opposite Kinnevik Investment and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| Kinnevik Investment vs. Home Depot | Kinnevik Investment vs. Weiss Korea Opportunity | Kinnevik Investment vs. River and Mercantile | Kinnevik Investment vs. Chrysalis Investments |
| Metals Exploration vs. Cairn Homes PLC | Metals Exploration vs. New Residential Investment | Metals Exploration vs. Kinnevik Investment AB | Metals Exploration vs. Jupiter Green Investment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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