Correlation Between KTAM Gold and BCAP Mid
Can any of the company-specific risk be diversified away by investing in both KTAM Gold and BCAP Mid 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 KTAM Gold and BCAP Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTAM Gold ETF and BCAP Mid Small, you can compare the effects of market volatilities on KTAM Gold and BCAP Mid 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 KTAM Gold with a short position of BCAP Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTAM Gold and BCAP Mid.
Diversification Opportunities for KTAM Gold and BCAP Mid
Very good diversification
The 3 months correlation between KTAM and BCAP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding KTAM Gold ETF and BCAP Mid Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCAP Mid Small and KTAM Gold 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 KTAM Gold ETF are associated (or correlated) with BCAP Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCAP Mid Small has no effect on the direction of KTAM Gold i.e., KTAM Gold and BCAP Mid go up and down completely randomly.
Pair Corralation between KTAM Gold and BCAP Mid
Assuming the 90 days trading horizon KTAM Gold is expected to generate 1.95 times less return on investment than BCAP Mid. But when comparing it to its historical volatility, KTAM Gold ETF is 1.41 times less risky than BCAP Mid. It trades about 0.06 of its potential returns per unit of risk. BCAP Mid Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 910.00 in BCAP Mid Small on September 4, 2024 and sell it today you would lose (4.00) from holding BCAP Mid Small or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KTAM Gold ETF vs. BCAP Mid Small
Performance |
| Timeline |
| KTAM Gold ETF |
| BCAP Mid Small |
KTAM Gold and BCAP Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KTAM Gold and BCAP Mid
The main advantage of trading using opposite KTAM Gold and BCAP Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTAM Gold position performs unexpectedly, BCAP Mid 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 BCAP Mid will offset losses from the drop in BCAP Mid's long position.The idea behind KTAM Gold ETF and BCAP Mid Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BCAP Mid vs. BCAP SET100 | BCAP Mid vs. BCAP MSCI Thailand | BCAP Mid vs. United Hero ETF | BCAP Mid vs. WISE KTAM CSI |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |