Correlation Between Kinnevik Investment and Annexin Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Annexin Pharmaceuticals 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 Annexin Pharmaceuticals 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 Annexin Pharmaceuticals AB, you can compare the effects of market volatilities on Kinnevik Investment and Annexin Pharmaceuticals 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 Annexin Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Annexin Pharmaceuticals.
Diversification Opportunities for Kinnevik Investment and Annexin Pharmaceuticals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinnevik and Annexin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Annexin Pharmaceuticals AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexin Pharmaceuticals 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 Annexin Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexin Pharmaceuticals has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Annexin Pharmaceuticals go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Annexin Pharmaceuticals
Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 2.6 times less return on investment than Annexin Pharmaceuticals. But when comparing it to its historical volatility, Kinnevik Investment AB is 2.18 times less risky than Annexin Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Annexin Pharmaceuticals AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Annexin Pharmaceuticals AB on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Annexin Pharmaceuticals AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Annexin Pharmaceuticals AB
Performance |
| Timeline |
| Kinnevik Investment |
| Annexin Pharmaceuticals |
Kinnevik Investment and Annexin Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Annexin Pharmaceuticals
The main advantage of trading using opposite Kinnevik Investment and Annexin Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Annexin Pharmaceuticals 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 Annexin Pharmaceuticals will offset losses from the drop in Annexin Pharmaceuticals' long position.| Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Investment AB Latour | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. Tele2 AB |
| Annexin Pharmaceuticals vs. Cantargia AB | Annexin Pharmaceuticals vs. Biovica International AB | Annexin Pharmaceuticals vs. Ascelia Pharma AB | Annexin Pharmaceuticals vs. Cyxone 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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