Correlation Between BKI Investment and Mayfield Childcare
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Mayfield Childcare 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 Mayfield Childcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Mayfield Childcare, you can compare the effects of market volatilities on BKI Investment and Mayfield Childcare 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 Mayfield Childcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Mayfield Childcare.
Diversification Opportunities for BKI Investment and Mayfield Childcare
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKI and Mayfield is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Mayfield Childcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfield Childcare 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 Mayfield Childcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfield Childcare has no effect on the direction of BKI Investment i.e., BKI Investment and Mayfield Childcare go up and down completely randomly.
Pair Corralation between BKI Investment and Mayfield Childcare
Assuming the 90 days trading horizon BKI Investment is expected to under-perform the Mayfield Childcare. But the stock apears to be less risky and, when comparing its historical volatility, BKI Investment is 2.76 times less risky than Mayfield Childcare. The stock trades about -0.04 of its potential returns per unit of risk. The Mayfield Childcare is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Mayfield Childcare on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Mayfield Childcare or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Mayfield Childcare
Performance |
| Timeline |
| BKI Investment |
| Mayfield Childcare |
BKI Investment and Mayfield Childcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Mayfield Childcare
The main advantage of trading using opposite BKI Investment and Mayfield Childcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Mayfield Childcare 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 Mayfield Childcare will offset losses from the drop in Mayfield Childcare's long position.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. GQG Partners DRC | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
| Mayfield Childcare vs. Alternative Investment Trust | Mayfield Childcare vs. Platinum Asset Management | Mayfield Childcare vs. BKI Investment | Mayfield Childcare vs. Carlton Investments |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |