Correlation Between Khiron Life and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Khiron Life and Major Drilling 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 Khiron Life and Major Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khiron Life Sciences and Major Drilling Group, you can compare the effects of market volatilities on Khiron Life and Major Drilling 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 Khiron Life with a short position of Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Major Drilling.
Diversification Opportunities for Khiron Life and Major Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Khiron and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Khiron Life i.e., Khiron Life and Major Drilling go up and down completely randomly.
Pair Corralation between Khiron Life and Major Drilling
If you would invest 2.16 in Khiron Life Sciences on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Khiron Life Sciences or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Khiron Life Sciences vs. Major Drilling Group
Performance |
| Timeline |
| Khiron Life Sciences |
| Major Drilling Group |
Khiron Life and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khiron Life and Major Drilling
The main advantage of trading using opposite Khiron Life and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| Khiron Life vs. LPKF Laser Electronics | Khiron Life vs. Penn National Gaming | Khiron Life vs. STMICROELECTRONICS | Khiron Life vs. UET United Electronic |
| Major Drilling vs. BHP Group Limited | Major Drilling vs. BHP Group Limited | Major Drilling vs. Rio Tinto Group | Major Drilling vs. Rio Tinto Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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