Correlation Between Impax Environmental and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Kinnevik Investment AB, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Kinnevik Investment.
Diversification Opportunities for Impax Environmental and Kinnevik Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Impax and Kinnevik is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Impax Environmental and Kinnevik Investment
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.46 times more return on investment than Kinnevik Investment. However, Impax Environmental Markets is 2.17 times less risky than Kinnevik Investment. It trades about 0.51 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.21 per unit of risk. If you would invest 37,300 in Impax Environmental Markets on October 20, 2024 and sell it today you would earn a total of 3,250 from holding Impax Environmental Markets or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Kinnevik Investment AB
Performance |
| Timeline |
| Impax Environmental |
| Kinnevik Investment |
Impax Environmental and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Kinnevik Investment
The main advantage of trading using opposite Impax Environmental and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Power Metal Resources | Impax Environmental vs. AMG Advanced Metallurgical | Impax Environmental vs. Alien Metals | Impax Environmental vs. Nordic Semiconductor ASA |
| Kinnevik Investment vs. Zoom Video Communications | Kinnevik Investment vs. Ecclesiastical Insurance Office | Kinnevik Investment vs. United Internet AG | Kinnevik Investment vs. Gruppo MutuiOnline SpA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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