Correlation Between Investor and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Investor 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 Investor and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Kinnevik Investment AB, you can compare the effects of market volatilities on Investor 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 Investor with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Kinnevik Investment.
Diversification Opportunities for Investor and Kinnevik Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investor and Kinnevik is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Investor 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 Investor AB ser 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 Investor i.e., Investor and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Investor and Kinnevik Investment
Assuming the 90 days trading horizon Investor AB ser is expected to generate 0.39 times more return on investment than Kinnevik Investment. However, Investor AB ser is 2.54 times less risky than Kinnevik Investment. It trades about -0.04 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 30,290 in Investor AB ser on August 30, 2024 and sell it today you would lose (680.00) from holding Investor AB ser or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Kinnevik Investment AB
Performance |
| Timeline |
| Investor AB ser |
| Kinnevik Investment |
Investor and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Kinnevik Investment
The main advantage of trading using opposite Investor and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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.| Investor vs. Investor AB ser | Investor vs. Industrivarden AB ser | Investor vs. Investment AB Latour | Investor vs. Kinnevik Investment AB |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |