Correlation Between Kinnevik Investment and Reliance Industries
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Reliance Industries 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 Reliance Industries 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 Reliance Industries Ltd, you can compare the effects of market volatilities on Kinnevik Investment and Reliance Industries 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 Reliance Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Reliance Industries.
Diversification Opportunities for Kinnevik Investment and Reliance Industries
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and Reliance is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Reliance Industries Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Industries 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 Reliance Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Industries has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Reliance Industries go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Reliance Industries
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.74 times more return on investment than Reliance Industries. However, Kinnevik Investment is 1.74 times more volatile than Reliance Industries Ltd. It trades about 0.31 of its potential returns per unit of risk. Reliance Industries Ltd is currently generating about 0.02 per unit of risk. If you would invest 7,655 in Kinnevik Investment AB on November 2, 2024 and sell it today you would earn a total of 1,188 from holding Kinnevik Investment AB or generate 15.52% 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. Reliance Industries Ltd
Performance |
| Timeline |
| Kinnevik Investment |
| Reliance Industries |
Kinnevik Investment and Reliance Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Reliance Industries
The main advantage of trading using opposite Kinnevik Investment and Reliance Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Reliance Industries 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 Reliance Industries will offset losses from the drop in Reliance Industries' long position.| Kinnevik Investment vs. Morgan Advanced Materials | Kinnevik Investment vs. Atresmedia | Kinnevik Investment vs. Zinc Media Group | Kinnevik Investment vs. Pets at Home |
| Reliance Industries vs. Science in Sport | Reliance Industries vs. International Biotechnology Trust | Reliance Industries vs. Gaztransport et Technigaz | Reliance Industries vs. Capital Drilling |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |