Correlation Between Capital Income and Auking Mining
Can any of the company-specific risk be diversified away by investing in both Capital Income and Auking Mining 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 Capital Income and Auking Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Auking Mining, you can compare the effects of market volatilities on Capital Income and Auking Mining 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 Capital Income with a short position of Auking Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Auking Mining.
Diversification Opportunities for Capital Income and Auking Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Auking is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Auking Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auking Mining and Capital Income 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 Capital Income Builder are associated (or correlated) with Auking Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auking Mining has no effect on the direction of Capital Income i.e., Capital Income and Auking Mining go up and down completely randomly.
Pair Corralation between Capital Income and Auking Mining
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.06 times more return on investment than Auking Mining. However, Capital Income Builder is 16.53 times less risky than Auking Mining. It trades about 0.26 of its potential returns per unit of risk. Auking Mining is currently generating about -0.16 per unit of risk. If you would invest 6,893 in Capital Income Builder on November 3, 2024 and sell it today you would earn a total of 206.00 from holding Capital Income Builder or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Capital Income Builder vs. Auking Mining
Performance |
| Timeline |
| Capital Income Builder |
| Auking Mining |
Capital Income and Auking Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Auking Mining
The main advantage of trading using opposite Capital Income and Auking Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Auking Mining 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 Auking Mining will offset losses from the drop in Auking Mining's long position.| Capital Income vs. Blackrock Financial Institutions | Capital Income vs. Fidelity Advisor Financial | Capital Income vs. Blackstone Secured Lending | Capital Income vs. 1919 Financial Services |
| Auking Mining vs. Super Retail Group | Auking Mining vs. Dexus Convenience Retail | Auking Mining vs. Charter Hall Retail | Auking Mining vs. Advanced Braking Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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