Correlation Between Kinnevik Investment and SolTech Energy
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and SolTech Energy 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 SolTech Energy 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 SolTech Energy Sweden, you can compare the effects of market volatilities on Kinnevik Investment and SolTech Energy 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 SolTech Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and SolTech Energy.
Diversification Opportunities for Kinnevik Investment and SolTech Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinnevik and SolTech is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and SolTech Energy Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolTech Energy Sweden 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 SolTech Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolTech Energy Sweden has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and SolTech Energy go up and down completely randomly.
Pair Corralation between Kinnevik Investment and SolTech Energy
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.5 times more return on investment than SolTech Energy. However, Kinnevik Investment AB is 2.0 times less risky than SolTech Energy. It trades about 0.08 of its potential returns per unit of risk. SolTech Energy Sweden is currently generating about -0.13 per unit of risk. If you would invest 7,321 in Kinnevik Investment AB on September 12, 2024 and sell it today you would earn a total of 701.00 from holding Kinnevik Investment AB or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. SolTech Energy Sweden
Performance |
| Timeline |
| Kinnevik Investment |
| SolTech Energy Sweden |
Kinnevik Investment and SolTech Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and SolTech Energy
The main advantage of trading using opposite Kinnevik Investment and SolTech Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, SolTech Energy 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 SolTech Energy will offset losses from the drop in SolTech Energy'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 |
| SolTech Energy vs. Sinch AB | SolTech Energy vs. Embracer Group AB | SolTech Energy vs. Powercell Sweden | SolTech Energy vs. KABE Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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