Correlation Between Ambertech and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Ambertech 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 Ambertech and BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambertech and BKI Investment, you can compare the effects of market volatilities on Ambertech 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 Ambertech with a short position of BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambertech and BKI Investment.
Diversification Opportunities for Ambertech and BKI Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ambertech and BKI is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ambertech and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment and Ambertech 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 Ambertech 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 Ambertech i.e., Ambertech and BKI Investment go up and down completely randomly.
Pair Corralation between Ambertech and BKI Investment
Assuming the 90 days trading horizon Ambertech is expected to under-perform the BKI Investment. In addition to that, Ambertech is 4.85 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 0.0 per unit of volatility. If you would invest 174.00 in BKI Investment on October 25, 2024 and sell it today you would lose (1.00) from holding BKI Investment or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambertech vs. BKI Investment
Performance |
| Timeline |
| Ambertech |
| BKI Investment |
Ambertech and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambertech and BKI Investment
The main advantage of trading using opposite Ambertech and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambertech 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.| Ambertech vs. Bisalloy Steel Group | Ambertech vs. Pearl Gull Iron | Ambertech vs. Carlton Investments | Ambertech vs. Hotel Property Investments |
| BKI Investment vs. Magellan Financial Group | BKI Investment vs. Autosports Group | BKI Investment vs. Macquarie Bank Limited | BKI Investment vs. Bell Financial 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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