Correlation Between Kinnevik Investment and Pacific Horizon
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Pacific Horizon 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 Pacific Horizon 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 Pacific Horizon Investment, you can compare the effects of market volatilities on Kinnevik Investment and Pacific Horizon 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 Pacific Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Pacific Horizon.
Diversification Opportunities for Kinnevik Investment and Pacific Horizon
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinnevik and Pacific is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Pacific Horizon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Horizon Inve 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 Pacific Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Horizon Inve has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Pacific Horizon go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Pacific Horizon
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Pacific Horizon. In addition to that, Kinnevik Investment is 2.52 times more volatile than Pacific Horizon Investment. It trades about -0.02 of its total potential returns per unit of risk. Pacific Horizon Investment is currently generating about 0.03 per unit of volatility. If you would invest 54,053 in Pacific Horizon Investment on September 14, 2024 and sell it today you would earn a total of 3,947 from holding Pacific Horizon Investment or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.27% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Pacific Horizon Investment
Performance |
| Timeline |
| Kinnevik Investment |
| Pacific Horizon Inve |
Kinnevik Investment and Pacific Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Pacific Horizon
The main advantage of trading using opposite Kinnevik Investment and Pacific Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Pacific Horizon 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 Pacific Horizon will offset losses from the drop in Pacific Horizon's long position.| Kinnevik Investment vs. Caledonia Mining | Kinnevik Investment vs. Lundin Mining Corp | Kinnevik Investment vs. Coeur Mining | Kinnevik Investment vs. Universal Music Group |
| Pacific Horizon vs. Taylor Maritime Investments | Pacific Horizon vs. Kinnevik Investment AB | Pacific Horizon vs. International Consolidated Airlines | Pacific Horizon vs. Herald Investment Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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