Correlation Between Kinnevik Investment and Jacquet Metal

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

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

Diversification Opportunities for Kinnevik Investment and Jacquet Metal

0.09

Correlation Coefficient

Kinnevik Investment  Jacquet Metal

Significant diversification

The 3 months correlation between Kinnevik and Jacquet is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and Kinnevik Investment 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 Kinnevik Investment AB are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Jacquet Metal go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Jacquet Metal

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Jacquet Metal. In addition to that, Kinnevik Investment is 1.55 times more volatile than Jacquet Metal Service. It trades about -0.03 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.01 per unit of volatility. If you would invest  1,794  in Jacquet Metal Service on September 21, 2024 and sell it today you would lose (100.00) from holding Jacquet Metal Service or give up 5.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.91%
Values	Daily Returns

Kinnevik Investment AB  vs.  Jacquet Metal Service

Kinnevik Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinnevik Investment AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kinnevik Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Jacquet Metal Service

Risk-Adjusted Performance

6 of 100

OK

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

Pair Trading with Kinnevik Investment and Jacquet Metal

The main advantage of trading using opposite Kinnevik Investment and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinnevik Investment position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.

The idea behind Kinnevik Investment AB and Jacquet Metal Service 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.