Correlation Between Australian Bond and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Australian Bond and BKI 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 Australian Bond and BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Bond Exchange and BKI Investment, you can compare the effects of market volatilities on Australian Bond and BKI 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 Australian Bond with a short position of BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Bond and BKI Investment.
Diversification Opportunities for Australian Bond and BKI Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and BKI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Australian Bond Exchange and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment and Australian Bond 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 Australian Bond Exchange are associated (or correlated) with BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Australian Bond i.e., Australian Bond and BKI Investment go up and down completely randomly.
Pair Corralation between Australian Bond and BKI Investment
Assuming the 90 days trading horizon Australian Bond Exchange is expected to under-perform the BKI Investment. In addition to that, Australian Bond is 13.53 times more volatile than BKI Investment. It trades about -0.01 of its total potential returns per unit of risk. BKI Investment is currently generating about 0.02 per unit of volatility. If you would invest 164.00 in BKI Investment on November 8, 2024 and sell it today you would earn a total of 9.00 from holding BKI Investment or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Australian Bond Exchange vs. BKI Investment
Performance |
| Timeline |
| Australian Bond Exchange |
| BKI Investment |
Australian Bond and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Bond and BKI Investment
The main advantage of trading using opposite Australian Bond and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Bond position performs unexpectedly, BKI 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Australian Bond vs. Hotel Property Investments | Australian Bond vs. Dynamic Drill And | Australian Bond vs. Gtn | Australian Bond vs. Nufarm |
| BKI Investment vs. Zoom2u Technologies | BKI Investment vs. Clime Investment Management | BKI Investment vs. Hotel Property Investments | BKI Investment vs. Ras Technology Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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