Correlation Between ACDC Metals and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both ACDC Metals 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 ACDC Metals and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Kip McGrath Education, you can compare the effects of market volatilities on ACDC Metals 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 ACDC Metals with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Kip McGrath.
Diversification Opportunities for ACDC Metals and Kip McGrath
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ACDC and Kip is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals 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 ACDC Metals 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 ACDC Metals 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 ACDC Metals i.e., ACDC Metals and Kip McGrath go up and down completely randomly.
Pair Corralation between ACDC Metals and Kip McGrath
Assuming the 90 days trading horizon ACDC Metals is expected to generate 3.21 times more return on investment than Kip McGrath. However, ACDC Metals is 3.21 times more volatile than Kip McGrath Education. It trades about 0.01 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.06 per unit of risk. If you would invest 5.50 in ACDC Metals on October 26, 2024 and sell it today you would lose (0.20) from holding ACDC Metals or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. Kip McGrath Education
Performance |
| Timeline |
| ACDC Metals |
| Kip McGrath Education |
ACDC Metals and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Kip McGrath
The main advantage of trading using opposite ACDC Metals and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals 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.| ACDC Metals vs. Sports Entertainment Group | ACDC Metals vs. Skycity Entertainment Group | ACDC Metals vs. Vitura Health Limited | ACDC Metals vs. Australian Unity Office |
| Kip McGrath vs. Hutchison Telecommunications | Kip McGrath vs. Australian Unity Office | Kip McGrath vs. Homeco Daily Needs | Kip McGrath vs. Hudson Investment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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