Correlation Between Litigation Capital and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and Kinnevik Investment 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 Litigation Capital and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Kinnevik Investment AB, you can compare the effects of market volatilities on Litigation Capital and Kinnevik Investment 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 Litigation Capital with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Kinnevik Investment.
Diversification Opportunities for Litigation Capital and Kinnevik Investment
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Litigation and Kinnevik is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Litigation Capital i.e., Litigation Capital and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Litigation Capital and Kinnevik Investment
Assuming the 90 days trading horizon Litigation Capital Management is expected to generate 1.15 times more return on investment than Kinnevik Investment. However, Litigation Capital is 1.15 times more volatile than Kinnevik Investment AB. It trades about 0.07 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.08 per unit of risk. If you would invest 9,589 in Litigation Capital Management on September 12, 2024 and sell it today you would earn a total of 961.00 from holding Litigation Capital Management or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Litigation Capital Management vs. Kinnevik Investment AB
Performance |
| Timeline |
| Litigation Capital |
| Kinnevik Investment |
Litigation Capital and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Kinnevik Investment
The main advantage of trading using opposite Litigation Capital and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| Litigation Capital vs. Intuitive Investments Group | Litigation Capital vs. Universal Display Corp | Litigation Capital vs. Batm Advanced Communications | Litigation Capital vs. Arrow Electronics |
| Kinnevik Investment vs. Premier Foods PLC | Kinnevik Investment vs. Prudential Financial | Kinnevik Investment vs. Ameriprise Financial | Kinnevik Investment vs. Komercni Banka |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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