Correlation Between Modern Times and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Modern Times 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 Modern Times and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modern Times Group and Kinnevik Investment AB, you can compare the effects of market volatilities on Modern Times 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 Modern Times with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modern Times and Kinnevik Investment.
Diversification Opportunities for Modern Times and Kinnevik Investment
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Modern and Kinnevik is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Modern Times Group and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Modern Times 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 Modern Times Group 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 Modern Times i.e., Modern Times and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Modern Times and Kinnevik Investment
Assuming the 90 days trading horizon Modern Times Group is expected to generate 1.3 times more return on investment than Kinnevik Investment. However, Modern Times is 1.3 times more volatile than Kinnevik Investment AB. It trades about 0.27 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.05 per unit of risk. If you would invest 7,780 in Modern Times Group on August 29, 2024 and sell it today you would earn a total of 1,320 from holding Modern Times Group or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modern Times Group vs. Kinnevik Investment AB
Performance |
| Timeline |
| Modern Times Group |
| Kinnevik Investment |
Modern Times and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modern Times and Kinnevik Investment
The main advantage of trading using opposite Modern Times and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modern Times 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.| Modern Times vs. Kinnevik Investment AB | Modern Times vs. Tele2 AB | Modern Times vs. Getinge AB ser | Modern Times vs. Securitas AB |
| Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Investment AB Latour | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. Tele2 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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