Correlation Between Serstech and Kinnevik Investment

Can any of the company-specific risk be diversified away by investing in both Serstech and Kinnevik Investment 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 Serstech and Kinnevik Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Serstech AB and Kinnevik Investment AB, you can compare the effects of market volatilities on Serstech and Kinnevik Investment 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 Serstech with a short position of Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serstech and Kinnevik Investment.

Diversification Opportunities for Serstech and Kinnevik Investment

-0.79

Correlation Coefficient

Serstech  Kinnevik Investment

Pay attention - limited upside

The 3 months correlation between Serstech and Kinnevik is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Serstech AB and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment and Serstech 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 Serstech AB are associated (or correlated) with Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Serstech i.e., Serstech and Kinnevik Investment go up and down completely randomly.

Pair Corralation between Serstech and Kinnevik Investment

Assuming the 90 days trading horizon Serstech AB is expected to under-perform the Kinnevik Investment. But the stock apears to be less risky and, when comparing its historical volatility, Serstech AB is 1.08 times less risky than Kinnevik Investment. The stock trades about -0.15 of its potential returns per unit of risk. The Kinnevik Investment AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8,130  in Kinnevik Investment AB on April 23, 2025 and sell it today you would earn a total of  2,590  from holding Kinnevik Investment AB or generate 31.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Serstech AB  vs.  Kinnevik Investment AB

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.

Kinnevik Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinnevik Investment AB are ranked lower than 11 (%) 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.

Pair Trading with Serstech and Kinnevik Investment

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

The idea behind Serstech AB and Kinnevik Investment 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.