Correlation Between Kinnevik Investment and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Ferronordic 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 Ferronordic 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 Ferronordic AB, you can compare the effects of market volatilities on Kinnevik Investment and Ferronordic 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 Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Ferronordic.
Diversification Opportunities for Kinnevik Investment and Ferronordic
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and Ferronordic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Ferronordic go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Ferronordic
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Ferronordic. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.36 times less risky than Ferronordic. The stock trades about -0.05 of its potential returns per unit of risk. The Ferronordic AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,914 in Ferronordic AB on September 4, 2024 and sell it today you would earn a total of 906.00 from holding Ferronordic AB or generate 18.44% 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. Ferronordic AB
Performance |
| Timeline |
| Kinnevik Investment |
| Ferronordic AB |
Kinnevik Investment and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Ferronordic
The main advantage of trading using opposite Kinnevik Investment and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic'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 |
| Ferronordic vs. JLT Mobile Computers | Ferronordic vs. White Pearl Technology | Ferronordic vs. Upsales Technology AB | Ferronordic vs. Beowulf Mining PLC |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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