Correlation Between Kinnevik Investment and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Nordea 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 Nordea 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 Nordea Bank Abp, you can compare the effects of market volatilities on Kinnevik Investment and Nordea 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 Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Nordea Bank.
Diversification Opportunities for Kinnevik Investment and Nordea Bank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinnevik and Nordea is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp 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 Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Nordea Bank go up and down completely randomly.
Pair Corralation between Kinnevik Investment and Nordea Bank
Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 2.3 times more return on investment than Nordea Bank. However, Kinnevik Investment is 2.3 times more volatile than Nordea Bank Abp. It trades about 0.05 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.04 per unit of risk. If you would invest 7,361 in Kinnevik Investment AB on August 24, 2024 and sell it today you would earn a total of 133.00 from holding Kinnevik Investment AB or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinnevik Investment AB vs. Nordea Bank Abp
Performance |
| Timeline |
| Kinnevik Investment |
| Nordea Bank Abp |
Kinnevik Investment and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinnevik Investment and Nordea Bank
The main advantage of trading using opposite Kinnevik Investment and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Nordea 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 Nordea Bank will offset losses from the drop in Nordea Bank'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 |
| Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Swedbank AB | Nordea Bank vs. Arion banki hf |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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