Correlation Between Kinnevik Investment and Investor
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Investor 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 Investor 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 Investor AB ser, you can compare the effects of market volatilities on Kinnevik Investment and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Investor.
Diversification Opportunities for Kinnevik Investment and Investor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinnevik and Investor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Investor go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Investor
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Investor. In addition to that, Kinnevik Investment is 1.25 times more volatile than Investor AB ser. It trades about -0.13 of its total potential returns per unit of risk. Investor AB ser is currently generating about -0.11 per unit of volatility. If you would invest 32,050 in Investor AB ser on January 28, 2025 and sell it today you would lose (3,390) from holding Investor AB ser or give up 10.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Investor AB ser
Performance |
| Timeline |
| Kinnevik Investment |
| Investor AB ser |
Kinnevik Investment and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Investor
The main advantage of trading using opposite Kinnevik Investment and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Investment AB Latour | Kinnevik Investment vs. Industrivarden AB ser |
| Investor vs. Investor AB ser | Investor vs. Industrivarden AB ser | Investor vs. Investment AB Latour | Investor vs. Kinnevik Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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