Correlation Between Kinnevik Investment and Nordic Asia
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Nordic Asia 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 Nordic Asia 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 Nordic Asia Investment, you can compare the effects of market volatilities on Kinnevik Investment and Nordic Asia 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 Nordic Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Nordic Asia.
Diversification Opportunities for Kinnevik Investment and Nordic Asia
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinnevik and Nordic is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Nordic Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Asia Investment 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 Nordic Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Asia Investment has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Nordic Asia go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Nordic Asia
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.87 times more return on investment than Nordic Asia. However, Kinnevik Investment AB is 1.15 times less risky than Nordic Asia. It trades about -0.05 of its potential returns per unit of risk. Nordic Asia Investment is currently generating about -0.05 per unit of risk. If you would invest 16,500 in Kinnevik Investment AB on October 15, 2024 and sell it today you would lose (8,739) from holding Kinnevik Investment AB or give up 52.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Nordic Asia Investment
Performance |
| Timeline |
| Kinnevik Investment |
| Nordic Asia Investment |
Kinnevik Investment and Nordic Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Nordic Asia
The main advantage of trading using opposite Kinnevik Investment and Nordic Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Nordic Asia 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 Nordic Asia will offset losses from the drop in Nordic Asia'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 |
| Nordic Asia vs. White Pearl Technology | Nordic Asia vs. JLT Mobile Computers | Nordic Asia vs. Adventure Box Technology | Nordic Asia vs. FormPipe Software 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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