Correlation Between Kinnevik Investment and Scottish American
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Scottish American 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 Scottish American 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 Scottish American Investment, you can compare the effects of market volatilities on Kinnevik Investment and Scottish American 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 Scottish American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Scottish American.
Diversification Opportunities for Kinnevik Investment and Scottish American
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and Scottish is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Scottish American Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish American 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 Scottish American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish American has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Scottish American go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Scottish American
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Scottish American. In addition to that, Kinnevik Investment is 2.24 times more volatile than Scottish American Investment. It trades about -0.05 of its total potential returns per unit of risk. Scottish American Investment is currently generating about 0.02 per unit of volatility. If you would invest 50,630 in Scottish American Investment on August 29, 2024 and sell it today you would earn a total of 170.00 from holding Scottish American Investment or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Scottish American Investment
Performance |
| Timeline |
| Kinnevik Investment |
| Scottish American |
Kinnevik Investment and Scottish American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Scottish American
The main advantage of trading using opposite Kinnevik Investment and Scottish American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Scottish American 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 Scottish American will offset losses from the drop in Scottish American's long position.| Kinnevik Investment vs. Lendinvest PLC | Kinnevik Investment vs. Neometals | Kinnevik Investment vs. Coor Service Management | Kinnevik Investment vs. Albion Technology General |
| Scottish American vs. Toyota Motor Corp | Scottish American vs. Lendinvest PLC | Scottish American vs. Neometals | Scottish American vs. Coor Service Management |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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