Correlation Between SPASX Dividend and K2 Asset
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and K2 Asset 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 SPASX Dividend and K2 Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and K2 Asset Management, you can compare the effects of market volatilities on SPASX Dividend and K2 Asset 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 SPASX Dividend with a short position of K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and K2 Asset.
Diversification Opportunities for SPASX Dividend and K2 Asset
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPASX and KAM is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and K2 Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Asset Management and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with K2 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Asset Management has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and K2 Asset go up and down completely randomly.
Pair Corralation between SPASX Dividend and K2 Asset
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 25.08 times less return on investment than K2 Asset. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 4.65 times less risky than K2 Asset. It trades about 0.02 of its potential returns per unit of risk. K2 Asset Management is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4.80 in K2 Asset Management on August 28, 2024 and sell it today you would earn a total of 1.20 from holding K2 Asset Management or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. K2 Asset Management
Performance |
| Timeline |
SPASX Dividend and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
K2 Asset Management
Pair trading matchups for K2 Asset
Pair Trading with SPASX Dividend and K2 Asset
The main advantage of trading using opposite SPASX Dividend and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, K2 Asset 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 K2 Asset will offset losses from the drop in K2 Asset's long position.| SPASX Dividend vs. Red Hill Iron | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Champion Iron | SPASX Dividend vs. Autosports Group |
| K2 Asset vs. National Australia Bank | K2 Asset vs. National Australia Bank | K2 Asset vs. Westpac Banking | K2 Asset vs. National Australia Bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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