Correlation Between Kinnevik Investment and Catella AB
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Catella AB 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 Kinnevik Investment and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinnevik Investment AB and Catella AB, you can compare the effects of market volatilities on Kinnevik Investment and Catella AB 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 Kinnevik Investment with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Catella AB.
Diversification Opportunities for Kinnevik Investment and Catella AB
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinnevik and Catella is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and Kinnevik Investment 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 Kinnevik Investment AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Catella AB go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Catella AB
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.47 times more return on investment than Catella AB. However, Kinnevik Investment is 1.47 times more volatile than Catella AB. It trades about 0.19 of its potential returns per unit of risk. Catella AB is currently generating about -0.34 per unit of risk. If you would invest 7,443 in Kinnevik Investment AB on September 13, 2024 and sell it today you would earn a total of 579.00 from holding Kinnevik Investment AB or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Catella AB
Performance |
| Timeline |
| Kinnevik Investment |
| Catella AB |
Kinnevik Investment and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Catella AB
The main advantage of trading using opposite Kinnevik Investment and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Catella AB 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 Catella AB will offset losses from the drop in Catella AB's long position.| Kinnevik Investment vs. Catella AB | Kinnevik Investment vs. Catella AB A | Kinnevik Investment vs. KABE Group AB | Kinnevik Investment vs. IAR Systems Group |
| Catella AB vs. Clas Ohlson AB | Catella AB vs. New Wave Group | Catella AB vs. Bilia AB | Catella AB vs. Inwido AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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