Correlation Between British Amer and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both British Amer and Kip McGrath 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 British Amer and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Kip McGrath Education, you can compare the effects of market volatilities on British Amer and Kip McGrath 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 British Amer with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Kip McGrath.
Diversification Opportunities for British Amer and Kip McGrath
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between British and Kip is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and British Amer 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 Bailador Technology Invest are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of British Amer i.e., British Amer and Kip McGrath go up and down completely randomly.
Pair Corralation between British Amer and Kip McGrath
Assuming the 90 days trading horizon British Amer is expected to generate 25.13 times less return on investment than Kip McGrath. But when comparing it to its historical volatility, Bailador Technology Invest is 2.63 times less risky than Kip McGrath. It trades about 0.05 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Kip McGrath Education on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Kip McGrath Education or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Kip McGrath Education
Performance |
| Timeline |
| Bailador Technology |
| Kip McGrath Education |
British Amer and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Kip McGrath
The main advantage of trading using opposite British Amer and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. Macquarie Group | Kip McGrath vs. Macquarie Group Ltd | Kip McGrath vs. Challenger |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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