Correlation Between Golden Metal and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Kinnevik Investment AB, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Kinnevik Investment.
Diversification Opportunities for Golden Metal and Kinnevik Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Kinnevik is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Golden Metal and Kinnevik Investment
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 2.75 times more return on investment than Kinnevik Investment. However, Golden Metal is 2.75 times more volatile than Kinnevik Investment AB. It trades about 0.23 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.04 per unit of risk. If you would invest 2,600 in Golden Metal Resources on August 28, 2024 and sell it today you would earn a total of 700.00 from holding Golden Metal Resources or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Kinnevik Investment AB
Performance |
| Timeline |
| Golden Metal Resources |
| Kinnevik Investment |
Golden Metal and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Kinnevik Investment
The main advantage of trading using opposite Golden Metal and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Regions Financial Corp | Golden Metal vs. Panther Metals PLC | Golden Metal vs. Adriatic Metals | Golden Metal vs. Ally Financial |
| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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