Correlation Between Andrews Sykes and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Andrews Sykes and Kinnevik Investment 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 Andrews Sykes and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andrews Sykes Group and Kinnevik Investment AB, you can compare the effects of market volatilities on Andrews Sykes and Kinnevik Investment 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 Andrews Sykes with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrews Sykes and Kinnevik Investment.
Diversification Opportunities for Andrews Sykes and Kinnevik Investment
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Andrews and Kinnevik is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Andrews Sykes Group and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Andrews Sykes 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 Andrews Sykes Group are associated (or correlated) with Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Andrews Sykes i.e., Andrews Sykes and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Andrews Sykes and Kinnevik Investment
Assuming the 90 days trading horizon Andrews Sykes is expected to generate 52.26 times less return on investment than Kinnevik Investment. But when comparing it to its historical volatility, Andrews Sykes Group is 1.82 times less risky than Kinnevik Investment. It trades about 0.01 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,695 in Kinnevik Investment AB on November 3, 2024 and sell it today you would earn a total of 1,100 from holding Kinnevik Investment AB or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andrews Sykes Group vs. Kinnevik Investment AB
Performance |
| Timeline |
| Andrews Sykes Group |
| Kinnevik Investment |
Andrews Sykes and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andrews Sykes and Kinnevik Investment
The main advantage of trading using opposite Andrews Sykes and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andrews Sykes position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| Andrews Sykes vs. FC Investment Trust | Andrews Sykes vs. Jacquet Metal Service | Andrews Sykes vs. Endeavour Mining Corp | Andrews Sykes vs. GreenX Metals |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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