Correlation Between Kinnevik Investment and Givaudan

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

Diversification Opportunities for Kinnevik Investment and Givaudan

0.58

Correlation Coefficient

Kinnevik Investment  Givaudan

Very weak diversification

The 3 months correlation between Kinnevik and Givaudan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Givaudan go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Givaudan

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to under-perform the Givaudan. In addition to that, Kinnevik Investment is 1.46 times more volatile than Givaudan SA. It trades about -0.11 of its total potential returns per unit of risk. Givaudan SA is currently generating about 0.06 per unit of volatility. If you would invest  391,600  in Givaudan SA on September 24, 2024 and sell it today you would earn a total of  5,200  from holding Givaudan SA or generate 1.33% 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.  Givaudan SA

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. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Givaudan SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Kinnevik Investment AB and Givaudan SA 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.