Correlation Between Kinnevik Investment and Celebrus Technologies

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

Diversification Opportunities for Kinnevik Investment and Celebrus Technologies

-0.25

Correlation Coefficient

Kinnevik Investment  Celebrus Technologies

Very good diversification

The 3 months correlation between Kinnevik and Celebrus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Celebrus Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebrus Technologies plc 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 Celebrus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebrus Technologies plc has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Celebrus Technologies go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Celebrus Technologies

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.96 times more return on investment than Celebrus Technologies. However, Kinnevik Investment AB is 1.04 times less risky than Celebrus Technologies. It trades about 0.31 of its potential returns per unit of risk. Celebrus Technologies plc is currently generating about -0.29 per unit of risk. If you would invest  7,279  in Kinnevik Investment AB on October 25, 2024 and sell it today you would earn a total of  743.00  from holding Kinnevik Investment AB or generate 10.21% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Celebrus Technologies plc

Kinnevik Investment

Risk-Adjusted Performance

6 of 100

Modest

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

Celebrus Technologies plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celebrus Technologies plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kinnevik Investment and Celebrus Technologies

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

The idea behind Kinnevik Investment AB and Celebrus Technologies plc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.