Correlation Between Bio Gene and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Bio Gene 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 Bio Gene and K2 Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Gene Technology and K2 Asset Management, you can compare the effects of market volatilities on Bio Gene 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 Bio Gene with a short position of K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and K2 Asset.
Diversification Opportunities for Bio Gene and K2 Asset
Excellent diversification
The 3 months correlation between Bio and KAM is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology 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 Bio Gene 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 Bio Gene Technology 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 Bio Gene i.e., Bio Gene and K2 Asset go up and down completely randomly.
Pair Corralation between Bio Gene and K2 Asset
Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the K2 Asset. In addition to that, Bio Gene is 1.27 times more volatile than K2 Asset Management. It trades about -0.12 of its total potential returns per unit of risk. K2 Asset Management is currently generating about 0.37 per unit of volatility. If you would invest 5.00 in K2 Asset Management on September 1, 2024 and sell it today you would earn a total of 2.00 from holding K2 Asset Management or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. K2 Asset Management
Performance |
| Timeline |
| Bio Gene Technology |
| K2 Asset Management |
Bio Gene and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and K2 Asset
The main advantage of trading using opposite Bio Gene and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene 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.| Bio Gene vs. Northern Star Resources | Bio Gene vs. Evolution Mining | Bio Gene vs. Bluescope Steel | Bio Gene vs. Sandfire Resources NL |
| K2 Asset vs. WA1 Resources | K2 Asset vs. Predictive Discovery | K2 Asset vs. Cooper Metals | K2 Asset vs. OD6 Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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