Correlation Between Kinnevik Investment and I Tech
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and I Tech 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 I Tech 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 I Tech, you can compare the effects of market volatilities on Kinnevik Investment and I Tech 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 I Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and I Tech.
Diversification Opportunities for Kinnevik Investment and I Tech
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinnevik and ITECH is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and I Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Tech 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 I Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Tech has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and I Tech go up and down completely randomly.
Pair Corralation between Kinnevik Investment and I Tech
Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 1.49 times less return on investment than I Tech. But when comparing it to its historical volatility, Kinnevik Investment AB is 1.12 times less risky than I Tech. It trades about 0.08 of its potential returns per unit of risk. I Tech is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,780 in I Tech on September 12, 2024 and sell it today you would earn a total of 720.00 from holding I Tech or generate 15.06% 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. I Tech
Performance |
| Timeline |
| Kinnevik Investment |
| I Tech |
Kinnevik Investment and I Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and I Tech
The main advantage of trading using opposite Kinnevik Investment and I Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, I Tech 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 I Tech will offset losses from the drop in I Tech'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |