Correlation Between VNV Global and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both VNV Global 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 VNV Global and Kinnevik Investment 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 Kinnevik Investment AB, you can compare the effects of market volatilities on VNV Global 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 VNV Global with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNV Global and Kinnevik Investment.
Diversification Opportunities for VNV Global and Kinnevik Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VNV and Kinnevik is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VNV Global 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 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 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 VNV Global i.e., VNV Global and Kinnevik Investment go up and down completely randomly.
Pair Corralation between VNV Global and Kinnevik Investment
Assuming the 90 days trading horizon VNV Global is expected to generate 1.85 times less return on investment than Kinnevik Investment. In addition to that, VNV Global is 1.19 times more volatile than Kinnevik Investment AB. It trades about 0.01 of its total potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.02 per unit of volatility. If you would invest 7,552 in Kinnevik Investment AB on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Kinnevik Investment AB or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VNV Global AB vs. Kinnevik Investment AB
Performance |
| Timeline |
| VNV Global AB |
| Kinnevik Investment |
VNV Global and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNV Global and Kinnevik Investment
The main advantage of trading using opposite VNV Global and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNV Global 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.| VNV Global vs. Kinnevik Investment AB | VNV Global vs. Investor AB ser | VNV Global vs. Sinch AB | VNV Global vs. Vef AB |
| Kinnevik Investment vs. Investor AB ser | Kinnevik Investment vs. Investment AB Latour | Kinnevik Investment vs. Industrivarden AB ser | Kinnevik Investment vs. Tele2 AB |
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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