Correlation Between BKI Investment and Perpetual Credit
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Perpetual Credit 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 Perpetual Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Perpetual Credit Income, you can compare the effects of market volatilities on BKI Investment and Perpetual Credit 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 Perpetual Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Perpetual Credit.
Diversification Opportunities for BKI Investment and Perpetual Credit
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKI and Perpetual is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Perpetual Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetual Credit Income 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 Perpetual Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetual Credit Income has no effect on the direction of BKI Investment i.e., BKI Investment and Perpetual Credit go up and down completely randomly.
Pair Corralation between BKI Investment and Perpetual Credit
Assuming the 90 days trading horizon BKI Investment is expected to generate 51.0 times less return on investment than Perpetual Credit. But when comparing it to its historical volatility, BKI Investment is 2.65 times less risky than Perpetual Credit. It trades about 0.0 of its potential returns per unit of risk. Perpetual Credit Income is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Perpetual Credit Income on September 14, 2024 and sell it today you would earn a total of 1.00 from holding Perpetual Credit Income or generate 0.87% 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. Perpetual Credit Income
Performance |
| Timeline |
| BKI Investment |
| Perpetual Credit Income |
BKI Investment and Perpetual Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Perpetual Credit
The main advantage of trading using opposite BKI Investment and Perpetual Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Perpetual Credit 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 Perpetual Credit will offset losses from the drop in Perpetual Credit's long position.| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
| Perpetual Credit vs. Diversified United Investment | Perpetual Credit vs. K2 Asset Management | Perpetual Credit vs. Argo Investments | Perpetual Credit vs. BKI Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |