Correlation Between Kinnevik Investment and Castellum
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Castellum 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 Castellum 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 Castellum AB, you can compare the effects of market volatilities on Kinnevik Investment and Castellum 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 Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Castellum.
Diversification Opportunities for Kinnevik Investment and Castellum
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinnevik and Castellum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Castellum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum AB 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 Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Castellum go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Castellum
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.45 times more return on investment than Castellum. However, Kinnevik Investment is 1.45 times more volatile than Castellum AB. It trades about -0.04 of its potential returns per unit of risk. Castellum AB is currently generating about -0.32 per unit of risk. If you would invest 7,737 in Kinnevik Investment AB on August 29, 2024 and sell it today you would lose (174.00) from holding Kinnevik Investment AB or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Castellum AB
Performance |
| Timeline |
| Kinnevik Investment |
| Castellum AB |
Kinnevik Investment and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Castellum
The main advantage of trading using opposite Kinnevik Investment and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's 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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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