Correlation Between Hardide PLC and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Hardide PLC 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 Hardide PLC and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hardide PLC and Kinnevik Investment AB, you can compare the effects of market volatilities on Hardide PLC 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 Hardide PLC with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hardide PLC and Kinnevik Investment.
Diversification Opportunities for Hardide PLC and Kinnevik Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hardide and Kinnevik is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hardide PLC and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Hardide PLC 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 Hardide PLC 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 Hardide PLC i.e., Hardide PLC and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Hardide PLC and Kinnevik Investment
Assuming the 90 days trading horizon Hardide PLC is expected to under-perform the Kinnevik Investment. In addition to that, Hardide PLC is 1.65 times more volatile than Kinnevik Investment AB. It trades about -0.01 of its total potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.01 per unit of volatility. If you would invest 8,880 in Kinnevik Investment AB on November 28, 2024 and sell it today you would lose (35.00) from holding Kinnevik Investment AB or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.41% |
| Values | Daily Returns |
Hardide PLC vs. Kinnevik Investment AB
Performance |
| Timeline |
| Hardide PLC |
| Kinnevik Investment |
Hardide PLC and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hardide PLC and Kinnevik Investment
The main advantage of trading using opposite Hardide PLC and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hardide PLC 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.| Hardide PLC vs. Foresight Environmental Infrastructure | Hardide PLC vs. Schroders Investment Trusts | Hardide PLC vs. Hansa Investment | Hardide PLC vs. Mobius Investment Trust |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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