Correlation Between BKI Investment and ANZ Group
Can any of the company-specific risk be diversified away by investing in both BKI Investment and ANZ Group 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 BKI Investment and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and ANZ Group Holdings, you can compare the effects of market volatilities on BKI Investment and ANZ Group 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 BKI Investment with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and ANZ Group.
Diversification Opportunities for BKI Investment and ANZ Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BKI and ANZ is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and BKI Investment 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 BKI Investment are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of BKI Investment i.e., BKI Investment and ANZ Group go up and down completely randomly.
Pair Corralation between BKI Investment and ANZ Group
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.96 times more return on investment than ANZ Group. However, BKI Investment is 1.04 times less risky than ANZ Group. It trades about -0.06 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.14 per unit of risk. If you would invest 172.00 in BKI Investment on September 13, 2024 and sell it today you would lose (1.00) from holding BKI Investment or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. ANZ Group Holdings
Performance |
| Timeline |
| BKI Investment |
| ANZ Group Holdings |
BKI Investment and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and ANZ Group
The main advantage of trading using opposite BKI Investment and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
| ANZ Group vs. Westpac Banking | ANZ Group vs. De Grey Mining | ANZ Group vs. Pointsbet Holdings | ANZ Group vs. Indiana Resources |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |