Correlation Between Kinnevik Investment and Power Metal
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Power Metal 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 Power Metal 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 Power Metal Resources, you can compare the effects of market volatilities on Kinnevik Investment and Power Metal 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 Power Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Power Metal.
Diversification Opportunities for Kinnevik Investment and Power Metal
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinnevik and Power is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources 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 Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Power Metal go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Power Metal
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Power Metal. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.38 times less risky than Power Metal. The stock trades about -0.12 of its potential returns per unit of risk. The Power Metal Resources is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Power Metal Resources on August 31, 2024 and sell it today you would lose (437.00) from holding Power Metal Resources or give up 23.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Power Metal Resources
Performance |
| Timeline |
| Kinnevik Investment |
| Power Metal Resources |
Kinnevik Investment and Power Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Power Metal
The main advantage of trading using opposite Kinnevik Investment and Power Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Power Metal 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 Power Metal will offset losses from the drop in Power Metal's long position.| Kinnevik Investment vs. Deltex Medical Group | Kinnevik Investment vs. Futura Medical | Kinnevik Investment vs. Spirent Communications plc | Kinnevik Investment vs. Aeorema Communications Plc |
| Power Metal vs. Hollywood Bowl Group | Power Metal vs. Centaur Media | Power Metal vs. Air Products Chemicals | Power Metal vs. Ecclesiastical Insurance Office |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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