Correlation Between Kinnevik Investment and Havsfrun Investment

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

Diversification Opportunities for Kinnevik Investment and Havsfrun Investment

0.02

Correlation Coefficient

Kinnevik Investment  Havsfrun Investment

Significant diversification

The 3 months correlation between Kinnevik and Havsfrun is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment 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 Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Havsfrun Investment go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Havsfrun Investment

Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 18.22 times less return on investment than Havsfrun Investment. But when comparing it to its historical volatility, Kinnevik Investment AB is 2.38 times less risky than Havsfrun Investment. It trades about 0.03 of its potential returns per unit of risk. Havsfrun Investment AB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,245  in Havsfrun Investment AB on December 25, 2024 and sell it today you would earn a total of  1,255  from holding Havsfrun Investment AB or generate 100.8% 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.  Havsfrun Investment AB

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.

Havsfrun Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinnevik Investment and Havsfrun Investment

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

The idea behind Kinnevik Investment AB and Havsfrun Investment AB 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.