Correlation Between Mekonomen and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Mekonomen 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 Mekonomen and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekonomen AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Mekonomen 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 Mekonomen with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekonomen and Kinnevik Investment.
Diversification Opportunities for Mekonomen and Kinnevik Investment
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mekonomen and Kinnevik is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mekonomen AB and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Mekonomen 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 Mekonomen AB 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 Mekonomen i.e., Mekonomen and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Mekonomen and Kinnevik Investment
Assuming the 90 days trading horizon Mekonomen is expected to generate 1.92 times less return on investment than Kinnevik Investment. But when comparing it to its historical volatility, Mekonomen AB is 1.34 times less risky than Kinnevik Investment. It trades about 0.11 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,443 in Kinnevik Investment AB on September 13, 2024 and sell it today you would earn a total of 487.00 from holding Kinnevik Investment AB or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mekonomen AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| Mekonomen AB |
| Kinnevik Investment |
Mekonomen and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekonomen and Kinnevik Investment
The main advantage of trading using opposite Mekonomen and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekonomen 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.| Mekonomen vs. Clas Ohlson AB | Mekonomen vs. Bilia AB | Mekonomen vs. Byggmax Group AB | Mekonomen vs. Peab AB |
| Kinnevik Investment vs. Kinnevik Investment AB | Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. L E Lundbergfretagen |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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