Correlation Between Kinnevik Investment and Intuitive Investments

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

Diversification Opportunities for Kinnevik Investment and Intuitive Investments

0.38

Correlation Coefficient

Kinnevik Investment  Intuitive Investments

Weak diversification

The 3 months correlation between Kinnevik and Intuitive is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Intuitive Investments go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Intuitive Investments

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 2.03 times more return on investment than Intuitive Investments. However, Kinnevik Investment is 2.03 times more volatile than Intuitive Investments Group. It trades about 0.05 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.09 per unit of risk. If you would invest  7,541  in Kinnevik Investment AB on September 13, 2024 and sell it today you would earn a total of  478.00  from holding Kinnevik Investment AB or generate 6.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Kinnevik Investment AB  vs.  Intuitive Investments Group

Kinnevik Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kinnevik Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kinnevik Investment and Intuitive Investments

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

The idea behind Kinnevik Investment AB and Intuitive Investments Group 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.