Correlation Between VNV Global and Investor
Can any of the company-specific risk be diversified away by investing in both VNV Global and Investor 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 VNV Global and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNV Global AB and Investor AB ser, you can compare the effects of market volatilities on VNV Global and Investor 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 VNV Global with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNV Global and Investor.
Diversification Opportunities for VNV Global and Investor
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VNV and Investor is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VNV Global AB and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and VNV Global 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 VNV Global AB are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of VNV Global i.e., VNV Global and Investor go up and down completely randomly.
Pair Corralation between VNV Global and Investor
Assuming the 90 days trading horizon VNV Global is expected to generate 5.48 times less return on investment than Investor. In addition to that, VNV Global is 2.85 times more volatile than Investor AB ser. It trades about 0.01 of its total potential returns per unit of risk. Investor AB ser is currently generating about 0.11 per unit of volatility. If you would invest 19,002 in Investor AB ser on December 1, 2024 and sell it today you would earn a total of 12,973 from holding Investor AB ser or generate 68.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
VNV Global AB vs. Investor AB ser
Performance |
| Timeline |
| VNV Global AB |
| Investor AB ser |
VNV Global and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNV Global and Investor
The main advantage of trading using opposite VNV Global and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNV Global position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| VNV Global vs. Kinnevik Investment AB | VNV Global vs. Investor AB ser | VNV Global vs. Sinch AB | VNV Global vs. Vef AB |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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