Correlation Between Beam Communications and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Beam Communications 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 Beam Communications and K2 Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Communications Holdings and K2 Asset Management, you can compare the effects of market volatilities on Beam Communications 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 Beam Communications with a short position of K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Communications and K2 Asset.
Diversification Opportunities for Beam Communications and K2 Asset
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beam and KAM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Beam Communications Holdings 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 Beam Communications 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 Beam Communications Holdings 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 Beam Communications i.e., Beam Communications and K2 Asset go up and down completely randomly.
Pair Corralation between Beam Communications and K2 Asset
Assuming the 90 days trading horizon Beam Communications Holdings is expected to generate 1.16 times more return on investment than K2 Asset. However, Beam Communications is 1.16 times more volatile than K2 Asset Management. It trades about 0.12 of its potential returns per unit of risk. K2 Asset Management is currently generating about 0.08 per unit of risk. If you would invest 6.20 in Beam Communications Holdings on November 9, 2024 and sell it today you would earn a total of 0.60 from holding Beam Communications Holdings or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Communications Holdings vs. K2 Asset Management
Performance |
| Timeline |
| Beam Communications |
| K2 Asset Management |
Beam Communications and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Communications and K2 Asset
The main advantage of trading using opposite Beam Communications and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Communications 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.| Beam Communications vs. Westpac Banking | Beam Communications vs. Ecofibre | Beam Communications vs. iShares Global Healthcare | Beam Communications vs. Australian Dairy Farms |
| K2 Asset vs. Beam Communications Holdings | K2 Asset vs. Sports Entertainment Group | K2 Asset vs. Red Hill Iron | K2 Asset vs. Spirit Telecom |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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