Correlation Between BKI Investment and DY6 Metals
Can any of the company-specific risk be diversified away by investing in both BKI Investment and DY6 Metals 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 DY6 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and DY6 Metals, you can compare the effects of market volatilities on BKI Investment and DY6 Metals 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 DY6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and DY6 Metals.
Diversification Opportunities for BKI Investment and DY6 Metals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and DY6 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and DY6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DY6 Metals 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 DY6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DY6 Metals has no effect on the direction of BKI Investment i.e., BKI Investment and DY6 Metals go up and down completely randomly.
Pair Corralation between BKI Investment and DY6 Metals
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.24 times more return on investment than DY6 Metals. However, BKI Investment is 4.14 times less risky than DY6 Metals. It trades about 0.07 of its potential returns per unit of risk. DY6 Metals is currently generating about -0.01 per unit of risk. If you would invest 167.00 in BKI Investment on November 7, 2024 and sell it today you would earn a total of 2.00 from holding BKI Investment or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. DY6 Metals
Performance |
| Timeline |
| BKI Investment |
| DY6 Metals |
BKI Investment and DY6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and DY6 Metals
The main advantage of trading using opposite BKI Investment and DY6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, DY6 Metals 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 DY6 Metals will offset losses from the drop in DY6 Metals' long position.| BKI Investment vs. Beam Communications Holdings | BKI Investment vs. Health and Plant | BKI Investment vs. Maggie Beer Holdings | BKI Investment vs. Cleanaway Waste Management |
| DY6 Metals vs. 29Metals | DY6 Metals vs. Perseus Mining | DY6 Metals vs. Black Rock Mining | DY6 Metals vs. Advanced Braking Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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