Correlation Between Kinnevik Investment and TP ICAP

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

Diversification Opportunities for Kinnevik Investment and TP ICAP

0.93

Correlation Coefficient

Kinnevik Investment  TP ICAP

Almost no diversification

The 3 months correlation between Kinnevik and TCAP is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and TP ICAP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TP ICAP Group 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 TP ICAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TP ICAP Group has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and TP ICAP go up and down completely randomly.

Pair Corralation between Kinnevik Investment and TP ICAP

Assuming the 90 days trading horizon Kinnevik Investment is expected to generate 1.29 times less return on investment than TP ICAP. In addition to that, Kinnevik Investment is 1.59 times more volatile than TP ICAP Group. It trades about 0.13 of its total potential returns per unit of risk. TP ICAP Group is currently generating about 0.27 per unit of volatility. If you would invest  25,000  in TP ICAP Group on April 24, 2025 and sell it today you would earn a total of  5,650  from holding TP ICAP Group or generate 22.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.88%
Values	Daily Returns

Kinnevik Investment AB  vs.  TP ICAP Group

Kinnevik Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kinnevik Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

TP ICAP Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TP ICAP Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TP ICAP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinnevik Investment and TP ICAP

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

The idea behind Kinnevik Investment AB and TP ICAP 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.