Correlation Between Systemair and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Systemair 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 Systemair and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Systemair 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 Systemair with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Kinnevik Investment.
Diversification Opportunities for Systemair and Kinnevik Investment
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Systemair and Kinnevik is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Systemair 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 Systemair 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 Systemair 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 Systemair i.e., Systemair and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Systemair and Kinnevik Investment
Assuming the 90 days trading horizon Systemair AB is expected to generate 0.91 times more return on investment than Kinnevik Investment. However, Systemair AB is 1.1 times less risky than Kinnevik Investment. It trades about 0.04 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 6,742 in Systemair AB on September 13, 2024 and sell it today you would earn a total of 3,038 from holding Systemair AB or generate 45.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| Systemair AB |
| Kinnevik Investment |
Systemair and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Kinnevik Investment
The main advantage of trading using opposite Systemair and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair 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.| Systemair vs. Lindab International AB | Systemair vs. Nolato AB | Systemair vs. Sweco AB | Systemair vs. Troax Group AB |
| Kinnevik Investment vs. Catella AB | Kinnevik Investment vs. Catella AB A | Kinnevik Investment vs. KABE Group AB | Kinnevik Investment vs. IAR Systems Group |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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