Correlation Between Kinnevik Investment and Avanza Bank
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Avanza Bank 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 Avanza Bank 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 Avanza Bank Holding, you can compare the effects of market volatilities on Kinnevik Investment and Avanza Bank 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 Avanza Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Avanza Bank.
Diversification Opportunities for Kinnevik Investment and Avanza Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinnevik and Avanza is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Avanza Bank Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanza Bank Holding 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 Avanza Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanza Bank Holding has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Avanza Bank go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Avanza Bank
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 2.17 times more return on investment than Avanza Bank. However, Kinnevik Investment is 2.17 times more volatile than Avanza Bank Holding. It trades about 0.05 of its potential returns per unit of risk. Avanza Bank Holding is currently generating about -0.24 per unit of risk. If you would invest 7,387 in Kinnevik Investment AB on August 25, 2024 and sell it today you would earn a total of 147.00 from holding Kinnevik Investment AB or generate 1.99% 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. Avanza Bank Holding
Performance |
| Timeline |
| Kinnevik Investment |
| Avanza Bank Holding |
Kinnevik Investment and Avanza Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Avanza Bank
The main advantage of trading using opposite Kinnevik Investment and Avanza Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Avanza Bank 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 Avanza Bank will offset losses from the drop in Avanza Bank's long position.| Kinnevik Investment vs. Norva24 Group AB | Kinnevik Investment vs. KABE Group AB | Kinnevik Investment vs. IAR Systems Group | Kinnevik Investment vs. Clinical Laserthermia Systems |
| Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Skandinaviska Enskilda Banken | Avanza Bank vs. Swedbank AB | Avanza Bank vs. TF Bank 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 Stocks Directory module to find actively traded stocks across global markets.
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