Correlation Between Kinnevik Investment and Uranium Energy

Can any of the company-specific risk be diversified away by investing in both Kinnevik Investment and Uranium Energy 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 Uranium Energy 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 Uranium Energy Corp, you can compare the effects of market volatilities on Kinnevik Investment and Uranium Energy 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 Uranium Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinnevik Investment and Uranium Energy.

Diversification Opportunities for Kinnevik Investment and Uranium Energy

-0.4

Correlation Coefficient

Kinnevik Investment  Uranium Energy

Very good diversification

The 3 months correlation between Kinnevik and Uranium is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp 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 Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Uranium Energy go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Uranium Energy

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Uranium Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kinnevik Investment AB is 1.68 times less risky than Uranium Energy. The stock trades about -0.07 of its potential returns per unit of risk. The Uranium Energy Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  618.00  in Uranium Energy Corp on September 30, 2024 and sell it today you would earn a total of  79.00  from holding Uranium Energy Corp or generate 12.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Kinnevik Investment AB  vs.  Uranium Energy Corp

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Uranium Energy Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uranium Energy Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Uranium Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinnevik Investment and Uranium Energy

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

The idea behind Kinnevik Investment AB and Uranium Energy Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.