Correlation Between RTW Venture and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both RTW Venture 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 RTW Venture and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and Kinnevik Investment AB, you can compare the effects of market volatilities on RTW Venture 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 RTW Venture with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Kinnevik Investment.
Diversification Opportunities for RTW Venture and Kinnevik Investment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RTW and Kinnevik is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and RTW Venture 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 RTW Venture Fund 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 RTW Venture i.e., RTW Venture and Kinnevik Investment go up and down completely randomly.
Pair Corralation between RTW Venture and Kinnevik Investment
Assuming the 90 days trading horizon RTW Venture Fund is expected to generate 0.69 times more return on investment than Kinnevik Investment. However, RTW Venture Fund is 1.46 times less risky than Kinnevik Investment. It trades about 0.05 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.11 per unit of risk. If you would invest 135.00 in RTW Venture Fund on September 3, 2024 and sell it today you would earn a total of 14.00 from holding RTW Venture Fund or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.01% |
| Values | Daily Returns |
RTW Venture Fund vs. Kinnevik Investment AB
Performance |
| Timeline |
| RTW Venture Fund |
| Kinnevik Investment |
RTW Venture and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and Kinnevik Investment
The main advantage of trading using opposite RTW Venture and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture 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.| RTW Venture vs. Gaztransport et Technigaz | RTW Venture vs. Broadcom | RTW Venture vs. Empire Metals Limited | RTW Venture vs. Cornish Metals |
| Kinnevik Investment vs. Catalyst Media Group | Kinnevik Investment vs. CATLIN GROUP | Kinnevik Investment vs. Magnora ASA | Kinnevik Investment vs. RTW Venture Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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