Correlation Between BKI Investment and Zoom2u Technologies
Can any of the company-specific risk be diversified away by investing in both BKI Investment and Zoom2u Technologies 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 Zoom2u Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Zoom2u Technologies, you can compare the effects of market volatilities on BKI Investment and Zoom2u Technologies 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 Zoom2u Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Zoom2u Technologies.
Diversification Opportunities for BKI Investment and Zoom2u Technologies
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKI and Zoom2u is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Zoom2u Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom2u Technologies 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 Zoom2u Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom2u Technologies has no effect on the direction of BKI Investment i.e., BKI Investment and Zoom2u Technologies go up and down completely randomly.
Pair Corralation between BKI Investment and Zoom2u Technologies
Assuming the 90 days trading horizon BKI Investment is expected to generate 3.2 times less return on investment than Zoom2u Technologies. But when comparing it to its historical volatility, BKI Investment is 4.89 times less risky than Zoom2u Technologies. It trades about 0.02 of its potential returns per unit of risk. Zoom2u Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9.10 in Zoom2u Technologies on August 27, 2024 and sell it today you would lose (1.30) from holding Zoom2u Technologies or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Zoom2u Technologies
Performance |
| Timeline |
| BKI Investment |
| Zoom2u Technologies |
BKI Investment and Zoom2u Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Zoom2u Technologies
The main advantage of trading using opposite BKI Investment and Zoom2u Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Zoom2u Technologies 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 Zoom2u Technologies will offset losses from the drop in Zoom2u Technologies' 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 |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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