Correlation Between CAP LEASE and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Kinnevik Investment AB, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Kinnevik Investment.
Diversification Opportunities for CAP LEASE and Kinnevik Investment
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAP and Kinnevik is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Kinnevik Investment go up and down completely randomly.
Pair Corralation between CAP LEASE and Kinnevik Investment
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 1.38 times more return on investment than Kinnevik Investment. However, CAP LEASE is 1.38 times more volatile than Kinnevik Investment AB. It trades about -0.03 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.05 per unit of risk. If you would invest 100.00 in CAP LEASE AVIATION on October 16, 2024 and sell it today you would lose (50.00) from holding CAP LEASE AVIATION or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.23% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Kinnevik Investment AB
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Kinnevik Investment |
CAP LEASE and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Kinnevik Investment
The main advantage of trading using opposite CAP LEASE and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. International Biotechnology Trust | CAP LEASE vs. AMG Advanced Metallurgical | CAP LEASE vs. Lindsell Train Investment | CAP LEASE vs. Virgin Wines UK |
| Kinnevik Investment vs. Anglo Asian Mining | Kinnevik Investment vs. Ecclesiastical Insurance Office | Kinnevik Investment vs. CAP LEASE AVIATION | Kinnevik Investment vs. iShares Physical Silver |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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