Correlation Between BKI Investment and Walkabout Resources
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Walkabout Resources 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 Walkabout Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Walkabout Resources, you can compare the effects of market volatilities on BKI Investment and Walkabout Resources 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 Walkabout Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Walkabout Resources.
Diversification Opportunities for BKI Investment and Walkabout Resources
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BKI and Walkabout is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Walkabout Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walkabout Resources 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 Walkabout Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walkabout Resources has no effect on the direction of BKI Investment i.e., BKI Investment and Walkabout Resources go up and down completely randomly.
Pair Corralation between BKI Investment and Walkabout Resources
If you would invest 9.50 in Walkabout Resources on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Walkabout Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Walkabout Resources
Performance |
| Timeline |
| BKI Investment |
| Walkabout Resources |
BKI Investment and Walkabout Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Walkabout Resources
The main advantage of trading using opposite BKI Investment and Walkabout Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Walkabout Resources 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 Walkabout Resources will offset losses from the drop in Walkabout Resources' 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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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