Correlation Between Nexam Chemical and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical 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 Nexam Chemical and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexam Chemical Holding and Kinnevik Investment AB, you can compare the effects of market volatilities on Nexam Chemical 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 Nexam Chemical with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Kinnevik Investment.
Diversification Opportunities for Nexam Chemical and Kinnevik Investment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexam and Kinnevik is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Nexam Chemical 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 Nexam Chemical Holding 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 Nexam Chemical i.e., Nexam Chemical and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Nexam Chemical and Kinnevik Investment
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the Kinnevik Investment. In addition to that, Nexam Chemical is 1.15 times more volatile than Kinnevik Investment AB. It trades about -0.05 of its total potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.02 per unit of volatility. If you would invest 7,613 in Kinnevik Investment AB on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Kinnevik Investment AB or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Kinnevik Investment AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Kinnevik Investment |
Nexam Chemical and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Kinnevik Investment
The main advantage of trading using opposite Nexam Chemical and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical 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.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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