Correlation Between Monks Investment and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Monks Investment 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 Monks Investment and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and Kinnevik Investment AB, you can compare the effects of market volatilities on Monks Investment 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 Monks Investment with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Kinnevik Investment.
Diversification Opportunities for Monks Investment and Kinnevik Investment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monks and Kinnevik is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Monks 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Monks Investment and Kinnevik Investment
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.43 times more return on investment than Kinnevik Investment. However, Monks Investment Trust is 2.3 times less risky than Kinnevik Investment. It trades about 0.15 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.07 per unit of risk. If you would invest 114,000 in Monks Investment Trust on November 2, 2024 and sell it today you would earn a total of 18,400 from holding Monks Investment Trust or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. Kinnevik Investment AB
Performance |
| Timeline |
| Monks Investment Trust |
| Kinnevik Investment |
Monks Investment and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and Kinnevik Investment
The main advantage of trading using opposite Monks Investment and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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.| Monks Investment vs. Taiwan Semiconductor Manufacturing | Monks Investment vs. AcadeMedia AB | Monks Investment vs. Intermediate Capital Group | Monks Investment vs. URU Metals |
| Kinnevik Investment vs. Morgan Advanced Materials | Kinnevik Investment vs. Atresmedia | Kinnevik Investment vs. Zinc Media Group | Kinnevik Investment vs. Pets at Home |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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