Correlation Between Challenger and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Challenger 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 Challenger and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Challenger and Kip McGrath Education, you can compare the effects of market volatilities on Challenger 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 Challenger with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Challenger and Kip McGrath.
Diversification Opportunities for Challenger and Kip McGrath
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Challenger and Kip is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Challenger 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 Challenger 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 Challenger 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 Challenger i.e., Challenger and Kip McGrath go up and down completely randomly.
Pair Corralation between Challenger and Kip McGrath
Assuming the 90 days trading horizon Challenger is expected to generate 5.2 times less return on investment than Kip McGrath. But when comparing it to its historical volatility, Challenger is 1.75 times less risky than Kip McGrath. It trades about 0.14 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Kip McGrath Education on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Kip McGrath Education or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Challenger vs. Kip McGrath Education
Performance |
| Timeline |
| Challenger |
| Kip McGrath Education |
Challenger and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Challenger and Kip McGrath
The main advantage of trading using opposite Challenger and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Challenger 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.| Challenger vs. Fisher Paykel Healthcare | Challenger vs. Aurelia Metals | Challenger vs. Apiam Animal Health | Challenger vs. DY6 Metals |
| Kip McGrath vs. Aurelia Metals | Kip McGrath vs. MetalsGrove Mining | Kip McGrath vs. EROAD | Kip McGrath vs. Duxton Broadacre Farms |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |