Correlation Between Boliden AB and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Boliden AB 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 Boliden AB and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Boliden AB 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 Boliden AB with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and Kinnevik Investment.
Diversification Opportunities for Boliden AB and Kinnevik Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boliden and Kinnevik is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Boliden AB 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 Boliden AB 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 Boliden AB i.e., Boliden AB and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Boliden AB and Kinnevik Investment
Assuming the 90 days trading horizon Boliden AB is expected to generate 1.3 times less return on investment than Kinnevik Investment. In addition to that, Boliden AB is 1.32 times more volatile than Kinnevik Investment AB. It trades about 0.17 of its total potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.29 per unit of volatility. If you would invest 7,950 in Kinnevik Investment AB on November 28, 2024 and sell it today you would earn a total of 1,185 from holding Kinnevik Investment AB or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| Boliden AB |
| Kinnevik Investment |
Boliden AB and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and Kinnevik Investment
The main advantage of trading using opposite Boliden AB and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB 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.| Boliden AB vs. Sandvik AB | Boliden AB vs. AB SKF | Boliden AB vs. Alfa Laval AB | Boliden AB vs. AB Electrolux |
| Kinnevik Investment vs. Kinnevik Investment AB | Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. L E Lundbergfretagen |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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