Correlation Between BKI Investment and Iodm
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Iodm 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 Iodm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Iodm, you can compare the effects of market volatilities on BKI Investment and Iodm 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 Iodm. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Iodm.
Diversification Opportunities for BKI Investment and Iodm
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and Iodm is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Iodm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iodm 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 Iodm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iodm has no effect on the direction of BKI Investment i.e., BKI Investment and Iodm go up and down completely randomly.
Pair Corralation between BKI Investment and Iodm
Assuming the 90 days trading horizon BKI Investment is expected to generate 13.98 times less return on investment than Iodm. But when comparing it to its historical volatility, BKI Investment is 5.58 times less risky than Iodm. It trades about 0.04 of its potential returns per unit of risk. Iodm is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Iodm on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Iodm or generate 7.14% 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. Iodm
Performance |
| Timeline |
| BKI Investment |
| Iodm |
BKI Investment and Iodm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Iodm
The main advantage of trading using opposite BKI Investment and Iodm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Iodm 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 Iodm will offset losses from the drop in Iodm's long position.| BKI Investment vs. Cleanspace Holdings | BKI Investment vs. My Foodie Box | BKI Investment vs. Technology One | BKI Investment vs. Complii FinTech Solutions |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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