Correlation Between ANZ Group and Kinatico
Can any of the company-specific risk be diversified away by investing in both ANZ Group and Kinatico 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 ANZ Group and Kinatico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANZ Group Holdings and Kinatico, you can compare the effects of market volatilities on ANZ Group and Kinatico 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 ANZ Group with a short position of Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Kinatico.
Diversification Opportunities for ANZ Group and Kinatico
Poor diversification
The 3 months correlation between ANZ and Kinatico is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of ANZ Group i.e., ANZ Group and Kinatico go up and down completely randomly.
Pair Corralation between ANZ Group and Kinatico
Assuming the 90 days trading horizon ANZ Group Holdings is expected to under-perform the Kinatico. But the stock apears to be less risky and, when comparing its historical volatility, ANZ Group Holdings is 25.63 times less risky than Kinatico. The stock trades about -0.13 of its potential returns per unit of risk. The Kinatico is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Kinatico on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Kinatico or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANZ Group Holdings vs. Kinatico
Performance |
| Timeline |
| ANZ Group Holdings |
| Kinatico |
ANZ Group and Kinatico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANZ Group and Kinatico
The main advantage of trading using opposite ANZ Group and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group position performs unexpectedly, Kinatico 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 Kinatico will offset losses from the drop in Kinatico's long position.| ANZ Group vs. Readytech Holdings | ANZ Group vs. Retail Food Group | ANZ Group vs. Charter Hall Retail | ANZ Group vs. Advanced Braking Technology |
| Kinatico vs. MFF Capital Investments | Kinatico vs. Flagship Investments | Kinatico vs. Alto Metals | Kinatico vs. Sandon 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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