Correlation Between Norva24 Group and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Norva24 Group 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 Norva24 Group and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norva24 Group AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Norva24 Group 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 Norva24 Group with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and Kinnevik Investment.
Diversification Opportunities for Norva24 Group and Kinnevik Investment
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norva24 and Kinnevik is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group 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 Norva24 Group 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 Norva24 Group 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 Norva24 Group i.e., Norva24 Group and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Norva24 Group and Kinnevik Investment
Assuming the 90 days trading horizon Norva24 Group AB is expected to generate 0.96 times more return on investment than Kinnevik Investment. However, Norva24 Group AB is 1.04 times less risky than Kinnevik Investment. It trades about 0.0 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.04 per unit of risk. If you would invest 3,070 in Norva24 Group AB on August 26, 2024 and sell it today you would lose (345.00) from holding Norva24 Group AB or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norva24 Group AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| Norva24 Group AB |
| Kinnevik Investment |
Norva24 Group and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norva24 Group and Kinnevik Investment
The main advantage of trading using opposite Norva24 Group and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norva24 Group 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.| Norva24 Group vs. Minesto AB | Norva24 Group vs. Sivers IMA Holding | Norva24 Group vs. SolTech Energy Sweden | Norva24 Group vs. AAC Clyde Space |
| Kinnevik Investment vs. Norva24 Group AB | Kinnevik Investment vs. KABE Group AB | Kinnevik Investment vs. IAR Systems Group | Kinnevik Investment vs. Clinical Laserthermia Systems |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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