Correlation Between Kinnevik Investment and Svolder AB

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

Diversification Opportunities for Kinnevik Investment and Svolder AB

0.47

Correlation Coefficient

Kinnevik Investment  Svolder AB

Very weak diversification

The 3 months correlation between Kinnevik and Svolder is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Svolder AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svolder AB 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 Svolder AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svolder AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Svolder AB go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Svolder AB

Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 3.29 times less return on investment than Svolder AB. In addition to that, Kinnevik Investment is 1.34 times more volatile than Svolder AB. It trades about 0.03 of its total potential returns per unit of risk. Svolder AB is currently generating about 0.11 per unit of volatility. If you would invest  5,175  in Svolder AB on December 24, 2024 and sell it today you would earn a total of  580.00  from holding Svolder AB or generate 11.21% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Svolder 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.

Svolder AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Svolder AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Svolder AB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kinnevik Investment and Svolder AB

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

The idea behind Kinnevik Investment AB and Svolder 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.