Correlation Between Kinnevik Investment and River
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Kinnevik Investment and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and River.
Diversification Opportunities for Kinnevik Investment and River
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinnevik and River is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and River go up and down completely randomly.
Pair Corralation between Kinnevik Investment and River
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.6 times more return on investment than River. However, Kinnevik Investment is 1.6 times more volatile than River and Mercantile. It trades about 0.06 of its potential returns per unit of risk. River and Mercantile is currently generating about 0.06 per unit of risk. If you would invest 7,802 in Kinnevik Investment AB on September 12, 2024 and sell it today you would earn a total of 177.00 from holding Kinnevik Investment AB or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinnevik Investment AB vs. River and Mercantile
Performance |
| Timeline |
| Kinnevik Investment |
| River and Mercantile |
Kinnevik Investment and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and River
The main advantage of trading using opposite Kinnevik Investment and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Kinnevik Investment vs. Hong Kong Land | Kinnevik Investment vs. Neometals | Kinnevik Investment vs. Coor Service Management | Kinnevik Investment vs. Fidelity Sustainable USD |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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