Correlation Between Tele2 AB and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Tele2 AB 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 Tele2 AB and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tele2 AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Tele2 AB 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 Tele2 AB with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tele2 AB and Kinnevik Investment.
Diversification Opportunities for Tele2 AB and Kinnevik Investment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tele2 and Kinnevik is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tele2 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 Tele2 AB 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 Tele2 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 Tele2 AB i.e., Tele2 AB and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Tele2 AB and Kinnevik Investment
Assuming the 90 days trading horizon Tele2 AB is expected to under-perform the Kinnevik Investment. But the stock apears to be less risky and, when comparing its historical volatility, Tele2 AB is 2.42 times less risky than Kinnevik Investment. The stock trades about -0.01 of its potential returns per unit of risk. The Kinnevik Investment AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,737 in Kinnevik Investment AB on August 28, 2024 and sell it today you would lose (52.00) from holding Kinnevik Investment AB or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tele2 AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| Tele2 AB |
| Kinnevik Investment |
Tele2 AB and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tele2 AB and Kinnevik Investment
The main advantage of trading using opposite Tele2 AB and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tele2 AB 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.| Tele2 AB vs. Lidds AB | Tele2 AB vs. Serstech AB | Tele2 AB vs. Transtema Group AB | Tele2 AB vs. Enorama Pharma AB |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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