Correlation Between Kinnevik Investment and Pets At

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

Diversification Opportunities for Kinnevik Investment and Pets At

-0.19

Correlation Coefficient

Kinnevik Investment  Pets At

Good diversification

The 3 months correlation between Kinnevik and Pets is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Pets At go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Pets At

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.69 times more return on investment than Pets At. However, Kinnevik Investment AB is 1.46 times less risky than Pets At. It trades about 0.19 of its potential returns per unit of risk. Pets at Home is currently generating about -0.11 per unit of risk. If you would invest  7,507  in Kinnevik Investment AB on November 20, 2024 and sell it today you would earn a total of  1,727  from holding Kinnevik Investment AB or generate 23.01% 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.  Pets at Home

Kinnevik Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 14 (%) 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.

Pets at Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pets at Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 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 Pets At

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

The idea behind Kinnevik Investment AB and Pets at Home 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..