Correlation Between BKI Investment and Capitol Health
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Capitol Health 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 Capitol Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Capitol Health, you can compare the effects of market volatilities on BKI Investment and Capitol Health 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 Capitol Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Capitol Health.
Diversification Opportunities for BKI Investment and Capitol Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and Capitol is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Capitol Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Health 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 Capitol Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Health has no effect on the direction of BKI Investment i.e., BKI Investment and Capitol Health go up and down completely randomly.
Pair Corralation between BKI Investment and Capitol Health
Assuming the 90 days trading horizon BKI Investment is expected to under-perform the Capitol Health. But the stock apears to be less risky and, when comparing its historical volatility, BKI Investment is 5.11 times less risky than Capitol Health. The stock trades about -0.17 of its potential returns per unit of risk. The Capitol Health is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Capitol Health on September 24, 2024 and sell it today you would earn a total of 1.00 from holding Capitol Health or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BKI Investment vs. Capitol Health
Performance |
| Timeline |
| BKI Investment |
| Capitol Health |
BKI Investment and Capitol Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Capitol Health
The main advantage of trading using opposite BKI Investment and Capitol Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Capitol Health 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 Capitol Health will offset losses from the drop in Capitol Health's long position.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income |
| Capitol Health vs. Saferoads Holdings | Capitol Health vs. Legacy Iron Ore | Capitol Health vs. Aussie Broadband | Capitol Health vs. K2 Asset Management |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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