Correlation Between Ironbark Capital and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital 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 Ironbark Capital and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ironbark Capital and Kip McGrath Education, you can compare the effects of market volatilities on Ironbark Capital 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 Ironbark Capital with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and Kip McGrath.
Diversification Opportunities for Ironbark Capital and Kip McGrath
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ironbark and Kip is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital i.e., Ironbark Capital and Kip McGrath go up and down completely randomly.
Pair Corralation between Ironbark Capital and Kip McGrath
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 86.35 times less return on investment than Kip McGrath. But when comparing it to its historical volatility, Ironbark Capital is 1.76 times less risky than Kip McGrath. It trades about 0.01 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Kip McGrath Education on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Kip McGrath Education or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironbark Capital vs. Kip McGrath Education
Performance |
| Timeline |
| Ironbark Capital |
| Kip McGrath Education |
Ironbark Capital and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and Kip McGrath
The main advantage of trading using opposite Ironbark Capital and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital 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.| Ironbark Capital vs. GQG Partners DRC | Ironbark Capital vs. MFF Capital Investments | Ironbark Capital vs. L1 Long Short | Ironbark Capital vs. BKI Investment |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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