Correlation Between Kinnevik Investment and Trainline Plc
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Trainline Plc 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 Trainline Plc 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 Trainline Plc, you can compare the effects of market volatilities on Kinnevik Investment and Trainline Plc 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 Trainline Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Trainline Plc.
Diversification Opportunities for Kinnevik Investment and Trainline Plc
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Trainline is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Trainline Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trainline Plc 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 Trainline Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trainline Plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Trainline Plc go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Trainline Plc
Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 3.86 times less return on investment than Trainline Plc. But when comparing it to its historical volatility, Kinnevik Investment AB is 1.15 times less risky than Trainline Plc. It trades about 0.02 of its potential returns per unit of risk. Trainline Plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 39,700 in Trainline Plc on September 3, 2024 and sell it today you would earn a total of 1,080 from holding Trainline Plc or generate 2.72% 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. Trainline Plc
Performance |
| Timeline |
| Kinnevik Investment |
| Trainline Plc |
Kinnevik Investment and Trainline Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Trainline Plc
The main advantage of trading using opposite Kinnevik Investment and Trainline Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Trainline Plc 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 Trainline Plc will offset losses from the drop in Trainline Plc's long position.| Kinnevik Investment vs. Catalyst Media Group | Kinnevik Investment vs. CATLIN GROUP | Kinnevik Investment vs. Magnora ASA | Kinnevik Investment vs. RTW Venture Fund |
| Trainline Plc vs. GoldMining | Trainline Plc vs. Metals Exploration Plc | Trainline Plc vs. Panther Metals PLC | Trainline Plc vs. Endeavour Mining Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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