Correlation Between BKI Investment and Champion Iron
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Champion Iron 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 Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Champion Iron, you can compare the effects of market volatilities on BKI Investment and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Champion Iron.
Diversification Opportunities for BKI Investment and Champion Iron
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BKI and Champion is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of BKI Investment i.e., BKI Investment and Champion Iron go up and down completely randomly.
Pair Corralation between BKI Investment and Champion Iron
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.22 times more return on investment than Champion Iron. However, BKI Investment is 4.51 times less risky than Champion Iron. It trades about 0.0 of its potential returns per unit of risk. Champion Iron is currently generating about -0.08 per unit of risk. If you would invest 172.00 in BKI Investment on August 29, 2024 and sell it today you would earn a total of 0.00 from holding BKI Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BKI Investment vs. Champion Iron
Performance |
| Timeline |
| BKI Investment |
| Champion Iron |
BKI Investment and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Champion Iron
The main advantage of trading using opposite BKI Investment and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. Australian United Investment |
| Champion Iron vs. Future Generation Global | Champion Iron vs. Rubicon Water | Champion Iron vs. Kinatico | Champion Iron vs. Jade Gas Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |