Correlation Between BKI Investment and MFF Capital
Can any of the company-specific risk be diversified away by investing in both BKI Investment and MFF Capital 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 MFF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and MFF Capital Investments, you can compare the effects of market volatilities on BKI Investment and MFF Capital 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 MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and MFF Capital.
Diversification Opportunities for BKI Investment and MFF Capital
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and MFF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments 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 MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of BKI Investment i.e., BKI Investment and MFF Capital go up and down completely randomly.
Pair Corralation between BKI Investment and MFF Capital
Assuming the 90 days trading horizon BKI Investment is expected to generate 196.18 times less return on investment than MFF Capital. But when comparing it to its historical volatility, BKI Investment is 1.78 times less risky than MFF Capital. It trades about 0.0 of its potential returns per unit of risk. MFF Capital Investments is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 388.00 in MFF Capital Investments on August 25, 2024 and sell it today you would earn a total of 29.00 from holding MFF Capital Investments or generate 7.47% 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. MFF Capital Investments
Performance |
| Timeline |
| BKI Investment |
| MFF Capital Investments |
BKI Investment and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and MFF Capital
The main advantage of trading using opposite BKI Investment and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, MFF Capital 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income |
| MFF Capital vs. Clime Investment Management | MFF Capital vs. Pinnacle Investment Management | MFF Capital vs. A1 Investments Resources | MFF Capital vs. M3 Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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