Correlation Between Kinnevik Investment and Zenicor Medical

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

Diversification Opportunities for Kinnevik Investment and Zenicor Medical

0.22

Correlation Coefficient

Kinnevik Investment  Zenicor Medical

Modest diversification

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

Pair Corralation between Kinnevik Investment and Zenicor Medical

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 0.41 times more return on investment than Zenicor Medical. However, Kinnevik Investment AB is 2.43 times less risky than Zenicor Medical. It trades about -0.06 of its potential returns per unit of risk. Zenicor Medical Systems is currently generating about -0.06 per unit of risk. If you would invest  16,560  in Kinnevik Investment AB on October 6, 2024 and sell it today you would lose (8,656) from holding Kinnevik Investment AB or give up 52.27% of portfolio value over 90 days.

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

Kinnevik Investment AB  vs.  Zenicor Medical Systems

Kinnevik Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinnevik Investment AB has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Zenicor Medical Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zenicor Medical Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Zenicor Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kinnevik Investment and Zenicor Medical

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

The idea behind Kinnevik Investment AB and Zenicor Medical Systems 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.