Correlation Between BKI Investment and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Kip McGrath 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 Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Kip McGrath Education, you can compare the effects of market volatilities on BKI Investment and Kip McGrath 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 Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Kip McGrath.
Diversification Opportunities for BKI Investment and Kip McGrath
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and Kip is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education 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 Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of BKI Investment i.e., BKI Investment and Kip McGrath go up and down completely randomly.
Pair Corralation between BKI Investment and Kip McGrath
Assuming the 90 days trading horizon BKI Investment is expected to generate 0.6 times more return on investment than Kip McGrath. However, BKI Investment is 1.66 times less risky than Kip McGrath. It trades about 0.07 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.13 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. Kip McGrath Education
Performance |
| Timeline |
| BKI Investment |
| Kip McGrath Education |
BKI Investment and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Kip McGrath
The main advantage of trading using opposite BKI Investment and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's 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 |
| Kip McGrath vs. K2 Asset Management | Kip McGrath vs. MFF Capital Investments | Kip McGrath vs. Microequities Asset Management | Kip McGrath vs. Pinnacle Investment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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