Correlation Between Black Iron and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Black Iron and Kiplin Metals 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 Black Iron and Kiplin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Iron and Kiplin Metals, you can compare the effects of market volatilities on Black Iron and Kiplin Metals 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 Black Iron with a short position of Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Iron and Kiplin Metals.
Diversification Opportunities for Black Iron and Kiplin Metals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Kiplin is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Black Iron and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals and Black Iron 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 Black Iron are associated (or correlated) with Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Black Iron i.e., Black Iron and Kiplin Metals go up and down completely randomly.
Pair Corralation between Black Iron and Kiplin Metals
Assuming the 90 days trading horizon Black Iron is expected to generate 4.58 times more return on investment than Kiplin Metals. However, Black Iron is 4.58 times more volatile than Kiplin Metals. It trades about 0.16 of its potential returns per unit of risk. Kiplin Metals is currently generating about -0.13 per unit of risk. If you would invest 6.00 in Black Iron on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Black Iron or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Iron vs. Kiplin Metals
Performance |
| Timeline |
| Black Iron |
| Kiplin Metals |
Black Iron and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Iron and Kiplin Metals
The main advantage of trading using opposite Black Iron and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Iron position performs unexpectedly, Kiplin Metals 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Black Iron vs. Northcliff Resources | Black Iron vs. St Augustine Gold | Black Iron vs. Mammoth Resources Corp | Black Iron vs. Black Widow Resources |
| Kiplin Metals vs. Algoma Steel Group | Kiplin Metals vs. Champion Iron | Kiplin Metals vs. International Zeolite Corp | Kiplin Metals vs. European Residential Real |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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