Correlation Between Kinnevik Investment and OptiCept Technologies
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and OptiCept Technologies 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 OptiCept Technologies 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 OptiCept Technologies AB, you can compare the effects of market volatilities on Kinnevik Investment and OptiCept Technologies 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 OptiCept Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and OptiCept Technologies.
Diversification Opportunities for Kinnevik Investment and OptiCept Technologies
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and OptiCept is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and OptiCept Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiCept Technologies 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 OptiCept Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiCept Technologies has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and OptiCept Technologies go up and down completely randomly.
Pair Corralation between Kinnevik Investment and OptiCept Technologies
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.07 times more return on investment than OptiCept Technologies. However, Kinnevik Investment is 1.07 times more volatile than OptiCept Technologies AB. It trades about -0.07 of its potential returns per unit of risk. OptiCept Technologies AB is currently generating about -0.16 per unit of risk. If you would invest 7,850 in Kinnevik Investment AB on August 30, 2024 and sell it today you would lose (288.00) from holding Kinnevik Investment AB or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. OptiCept Technologies AB
Performance |
| Timeline |
| Kinnevik Investment |
| OptiCept Technologies |
Kinnevik Investment and OptiCept Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and OptiCept Technologies
The main advantage of trading using opposite Kinnevik Investment and OptiCept Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, OptiCept Technologies 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 OptiCept Technologies will offset losses from the drop in OptiCept Technologies' 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 |
| OptiCept Technologies vs. Kinnevik Investment AB | OptiCept Technologies vs. Media and Games | OptiCept Technologies vs. Upsales Technology AB | OptiCept Technologies vs. Neola Medical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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