Correlation Between Oakley Capital and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Kinnevik Investment AB, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Kinnevik Investment.
Diversification Opportunities for Oakley Capital and Kinnevik Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oakley and Kinnevik is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Oakley Capital and Kinnevik Investment
Assuming the 90 days trading horizon Oakley Capital Investments is expected to generate 0.35 times more return on investment than Kinnevik Investment. However, Oakley Capital Investments is 2.88 times less risky than Kinnevik Investment. It trades about -0.02 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.12 per unit of risk. If you would invest 49,277 in Oakley Capital Investments on August 31, 2024 and sell it today you would lose (1,227) from holding Oakley Capital Investments or give up 2.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Oakley Capital Investments vs. Kinnevik Investment AB
Performance |
| Timeline |
| Oakley Capital Inves |
| Kinnevik Investment |
Oakley Capital and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Kinnevik Investment
The main advantage of trading using opposite Oakley Capital and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Bisichi Mining PLC | Oakley Capital vs. Panther Metals PLC | Oakley Capital vs. Zanaga Iron Ore | Oakley Capital vs. Ross Stores |
| Kinnevik Investment vs. Deltex Medical Group | Kinnevik Investment vs. Futura Medical | Kinnevik Investment vs. Spirent Communications plc | Kinnevik Investment vs. Aeorema Communications Plc |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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