Correlation Between Kaufman Et and Kinnevik Investment

Can any of the company-specific risk be diversified away by investing in both Kaufman Et 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 Kaufman Et and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kaufman Et Broad and Kinnevik Investment AB, you can compare the effects of market volatilities on Kaufman Et 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 Kaufman Et with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Kinnevik Investment.

Diversification Opportunities for Kaufman Et and Kinnevik Investment

0.72

Correlation Coefficient

Kaufman Et  Kinnevik Investment

Poor diversification

The 3 months correlation between Kaufman and Kinnevik is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Kaufman Et 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 Kaufman Et Broad 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 Kaufman Et i.e., Kaufman Et and Kinnevik Investment go up and down completely randomly.

Pair Corralation between Kaufman Et and Kinnevik Investment

Assuming the 90 days trading horizon Kaufman Et is expected to generate 1.9 times less return on investment than Kinnevik Investment. But when comparing it to its historical volatility, Kaufman Et Broad is 1.38 times less risky than Kinnevik Investment. It trades about 0.08 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  7,695  in Kinnevik Investment AB on December 1, 2024 and sell it today you would earn a total of  994.00  from holding Kinnevik Investment AB or generate 12.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Kaufman Et Broad  vs.  Kinnevik Investment AB

Kaufman Et Broad

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kaufman Et Broad are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kaufman Et may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kinnevik Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kinnevik Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaufman Et and Kinnevik Investment

The main advantage of trading using opposite Kaufman Et and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et 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.

The idea behind Kaufman Et Broad and Kinnevik Investment AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.