Correlation Between Kinnevik Investment and AB Electrolux
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and AB Electrolux 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 AB Electrolux 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 AB Electrolux, you can compare the effects of market volatilities on Kinnevik Investment and AB Electrolux 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 AB Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and AB Electrolux.
Diversification Opportunities for Kinnevik Investment and AB Electrolux
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and ELUX-A is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and AB Electrolux in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Electrolux 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 AB Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Electrolux has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and AB Electrolux go up and down completely randomly.
Pair Corralation between Kinnevik Investment and AB Electrolux
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the AB Electrolux. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.18 times less risky than AB Electrolux. The stock trades about -0.04 of its potential returns per unit of risk. The AB Electrolux is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 16,680 in AB Electrolux on September 14, 2024 and sell it today you would lose (5,580) from holding AB Electrolux or give up 33.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. AB Electrolux
Performance |
| Timeline |
| Kinnevik Investment |
| AB Electrolux |
Kinnevik Investment and AB Electrolux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and AB Electrolux
The main advantage of trading using opposite Kinnevik Investment and AB Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, AB Electrolux 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 AB Electrolux will offset losses from the drop in AB Electrolux's long position.| Kinnevik Investment vs. Kinnevik Investment AB | Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. L E Lundbergfretagen |
| AB Electrolux vs. AB SKF | AB Electrolux vs. Tele2 AB | AB Electrolux vs. Sandvik AB | AB Electrolux vs. Skanska 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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