Correlation Between Imugene and WA Kaolin
Can any of the company-specific risk be diversified away by investing in both Imugene and WA Kaolin 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 Imugene and WA Kaolin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imugene and WA Kaolin, you can compare the effects of market volatilities on Imugene and WA Kaolin 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 Imugene with a short position of WA Kaolin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imugene and WA Kaolin.
Diversification Opportunities for Imugene and WA Kaolin
Excellent diversification
The 3 months correlation between Imugene and WAK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Imugene and WA Kaolin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA Kaolin and Imugene 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 Imugene are associated (or correlated) with WA Kaolin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA Kaolin has no effect on the direction of Imugene i.e., Imugene and WA Kaolin go up and down completely randomly.
Pair Corralation between Imugene and WA Kaolin
Assuming the 90 days trading horizon Imugene is expected to under-perform the WA Kaolin. But the stock apears to be less risky and, when comparing its historical volatility, Imugene is 1.01 times less risky than WA Kaolin. The stock trades about -0.18 of its potential returns per unit of risk. The WA Kaolin is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.40 in WA Kaolin on September 2, 2024 and sell it today you would earn a total of 0.50 from holding WA Kaolin or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imugene vs. WA Kaolin
Performance |
| Timeline |
| Imugene |
| WA Kaolin |
Imugene and WA Kaolin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imugene and WA Kaolin
The main advantage of trading using opposite Imugene and WA Kaolin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imugene position performs unexpectedly, WA Kaolin 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 WA Kaolin will offset losses from the drop in WA Kaolin's long position.| Imugene vs. Bio Gene Technology | Imugene vs. Alto Metals | Imugene vs. Dug Technology | Imugene vs. Epsilon Healthcare |
| WA Kaolin vs. Northern Star Resources | WA Kaolin vs. Evolution Mining | WA Kaolin vs. Bluescope Steel | WA Kaolin vs. Sandfire Resources NL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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