Correlation Between Kinnevik Investment and Investment

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

Diversification Opportunities for Kinnevik Investment and Investment

0.77

Correlation Coefficient

Kinnevik Investment  Investment

Poor diversification

The 3 months correlation between Kinnevik and Investment is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Investment AB Oresund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment AB Oresund 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment AB Oresund has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Investment go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Investment

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.41 times more return on investment than Investment. However, Kinnevik Investment is 1.41 times more volatile than Investment AB Oresund. It trades about 0.18 of its potential returns per unit of risk. Investment AB Oresund is currently generating about 0.02 per unit of risk. If you would invest  7,830  in Kinnevik Investment AB on December 3, 2024 and sell it today you would earn a total of  1,243  from holding Kinnevik Investment AB or generate 15.87% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Investment AB Oresund

Kinnevik Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kinnevik Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Investment AB Oresund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investment AB Oresund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kinnevik Investment and Investment

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

The idea behind Kinnevik Investment AB and Investment AB Oresund 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.