Correlation Between Aussie Broadband and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Aussie Broadband and K2 Asset 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 Aussie Broadband and K2 Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aussie Broadband and K2 Asset Management, you can compare the effects of market volatilities on Aussie Broadband and K2 Asset 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 Aussie Broadband with a short position of K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aussie Broadband and K2 Asset.
Diversification Opportunities for Aussie Broadband and K2 Asset
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aussie and KAM is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aussie Broadband and K2 Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Asset Management and Aussie Broadband 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 Aussie Broadband are associated (or correlated) with K2 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Asset Management has no effect on the direction of Aussie Broadband i.e., Aussie Broadband and K2 Asset go up and down completely randomly.
Pair Corralation between Aussie Broadband and K2 Asset
Assuming the 90 days trading horizon Aussie Broadband is expected to generate 0.92 times more return on investment than K2 Asset. However, Aussie Broadband is 1.09 times less risky than K2 Asset. It trades about 0.07 of its potential returns per unit of risk. K2 Asset Management is currently generating about -0.31 per unit of risk. If you would invest 357.00 in Aussie Broadband on October 28, 2024 and sell it today you would earn a total of 8.00 from holding Aussie Broadband or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aussie Broadband vs. K2 Asset Management
Performance |
| Timeline |
| Aussie Broadband |
| K2 Asset Management |
Aussie Broadband and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aussie Broadband and K2 Asset
The main advantage of trading using opposite Aussie Broadband and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aussie Broadband position performs unexpectedly, K2 Asset 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 K2 Asset will offset losses from the drop in K2 Asset's long position.| Aussie Broadband vs. Hansen Technologies | Aussie Broadband vs. Ainsworth Game Technology | Aussie Broadband vs. MetalsGrove Mining | Aussie Broadband vs. Sky Metals |
| K2 Asset vs. Aneka Tambang Tbk | K2 Asset vs. Commonwealth Bank | K2 Asset vs. Commonwealth Bank of | K2 Asset vs. Australia and New |
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.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |