Correlation Between Kinnevik Investment and Adventure Box

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

Diversification Opportunities for Kinnevik Investment and Adventure Box

0.11

Correlation Coefficient

Kinnevik Investment  Adventure Box

Average diversification

The 3 months correlation between Kinnevik and Adventure is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Adventure Box Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventure Box Technology 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 Adventure Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventure Box Technology has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Adventure Box go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Adventure Box

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.2 times more return on investment than Adventure Box. However, Kinnevik Investment AB is 4.94 times less risky than Adventure Box. It trades about 0.03 of its potential returns per unit of risk. Adventure Box Technology is currently generating about -0.26 per unit of risk. If you would invest  7,468  in Kinnevik Investment AB on December 26, 2024 and sell it today you would earn a total of  214.00  from holding Kinnevik Investment AB or generate 2.87% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Adventure Box Technology

Kinnevik Investment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kinnevik Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Adventure Box Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adventure Box Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kinnevik Investment and Adventure Box

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

The idea behind Kinnevik Investment AB and Adventure Box Technology 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.