Correlation Between Kinnevik Investment and Creades AB
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Creades 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 Creades 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 Creades AB, you can compare the effects of market volatilities on Kinnevik Investment and Creades 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 Creades AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Creades AB.
Diversification Opportunities for Kinnevik Investment and Creades AB
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinnevik and Creades is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Creades AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creades 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 Creades AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creades AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Creades AB go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Creades AB
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Creades AB. In addition to that, Kinnevik Investment is 1.22 times more volatile than Creades AB. It trades about -0.04 of its total potential returns per unit of risk. Creades AB is currently generating about 0.01 per unit of volatility. If you would invest 7,292 in Creades AB on September 13, 2024 and sell it today you would earn a total of 58.00 from holding Creades AB or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Creades AB
Performance |
| Timeline |
| Kinnevik Investment |
| Creades AB |
Kinnevik Investment and Creades AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Creades AB
The main advantage of trading using opposite Kinnevik Investment and Creades AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Creades 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 Creades AB will offset losses from the drop in Creades 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 |
| Creades AB vs. Investment AB Latour | Creades AB vs. Bure Equity AB | Creades AB vs. Svolder AB | Creades AB vs. Kinnevik Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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