Correlation Between Kinnevik Investment and Serstech

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

Diversification Opportunities for Kinnevik Investment and Serstech

-0.78

Correlation Coefficient

Kinnevik Investment  Serstech

Pay attention - limited upside

The 3 months correlation between Kinnevik and Serstech is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinnevik Investment AB and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech 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 Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Kinnevik Investment i.e., Kinnevik Investment and Serstech go up and down completely randomly.

Pair Corralation between Kinnevik Investment and Serstech

Assuming the 90 days trading horizon Kinnevik Investment AB is expected to generate 1.11 times more return on investment than Serstech. However, Kinnevik Investment is 1.11 times more volatile than Serstech AB. It trades about 0.16 of its potential returns per unit of risk. Serstech AB is currently generating about -0.15 per unit of risk. If you would invest  7,980  in Kinnevik Investment AB on April 25, 2025 and sell it today you would earn a total of  2,680  from holding Kinnevik Investment AB or generate 33.58% return on investment over 90 days.

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

Kinnevik Investment AB  vs.  Serstech AB

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 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kinnevik Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Serstech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serstech 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 August 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 Serstech

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

The idea behind Kinnevik Investment AB and Serstech 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.