Correlation Between BKI Investment and Southern Cross
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Southern Cross Media, you can compare the effects of market volatilities on BKI Investment and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Southern Cross.
Diversification Opportunities for BKI Investment and Southern Cross
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKI and Southern is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of BKI Investment i.e., BKI Investment and Southern Cross go up and down completely randomly.
Pair Corralation between BKI Investment and Southern Cross
Assuming the 90 days trading horizon BKI Investment is expected to generate 7.85 times less return on investment than Southern Cross. But when comparing it to its historical volatility, BKI Investment is 5.55 times less risky than Southern Cross. It trades about 0.11 of its potential returns per unit of risk. Southern Cross Media is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Southern Cross Media on October 14, 2024 and sell it today you would earn a total of 5.00 from holding Southern Cross Media or generate 8.77% 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. Southern Cross Media
Performance |
| Timeline |
| BKI Investment |
| Southern Cross Media |
BKI Investment and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Southern Cross
The main advantage of trading using opposite BKI Investment and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| BKI Investment vs. Clime Investment Management | BKI Investment vs. Pinnacle Investment Management | BKI Investment vs. Data3 | BKI Investment vs. My Foodie Box |
| Southern Cross vs. National Storage REIT | Southern Cross vs. BKI Investment | Southern Cross vs. Aristocrat Leisure | Southern Cross vs. Autosports Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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