Correlation Between Kinnevik Investment and Systemair

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

Diversification Opportunities for Kinnevik Investment and Systemair

0.22

Correlation Coefficient

Kinnevik Investment  Systemair

Modest diversification

The 3 months correlation between Kinnevik and Systemair is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Systemair go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Systemair

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.1 times more return on investment than Systemair. However, Kinnevik Investment is 1.1 times more volatile than Systemair AB. It trades about 0.03 of its potential returns per unit of risk. Systemair AB is currently generating about -0.11 per unit of risk. If you would invest  7,468  in Kinnevik Investment AB on December 25, 2024 and sell it today you would earn a total of  152.00  from holding Kinnevik Investment AB or generate 2.04% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Systemair 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.

Systemair AB

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Kinnevik Investment AB and Systemair 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.