Correlation Between Advanced Braking and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Kip McGrath 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 Advanced Braking and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Kip McGrath Education, you can compare the effects of market volatilities on Advanced Braking and Kip McGrath 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 Advanced Braking with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Kip McGrath.
Diversification Opportunities for Advanced Braking and Kip McGrath
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Kip is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Advanced Braking i.e., Advanced Braking and Kip McGrath go up and down completely randomly.
Pair Corralation between Advanced Braking and Kip McGrath
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 1.59 times more return on investment than Kip McGrath. However, Advanced Braking is 1.59 times more volatile than Kip McGrath Education. It trades about 0.23 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.07 per unit of risk. If you would invest 8.10 in Advanced Braking Technology on October 29, 2024 and sell it today you would earn a total of 0.90 from holding Advanced Braking Technology or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. Kip McGrath Education
Performance |
| Timeline |
| Advanced Braking Tec |
| Kip McGrath Education |
Advanced Braking and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and Kip McGrath
The main advantage of trading using opposite Advanced Braking and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Advanced Braking vs. ACDC Metals | Advanced Braking vs. Hutchison Telecommunications | Advanced Braking vs. Epsilon Healthcare | Advanced Braking vs. Truscott Mining Corp |
| Kip McGrath vs. Clime Investment Management | Kip McGrath vs. Sun Silver Limited | Kip McGrath vs. BKI Investment | Kip McGrath vs. MFF Capital Investments |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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