Correlation Between K2 Asset and Austco Healthcare
Can any of the company-specific risk be diversified away by investing in both K2 Asset and Austco Healthcare 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 K2 Asset and Austco Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Asset Management and Austco Healthcare, you can compare the effects of market volatilities on K2 Asset and Austco Healthcare 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 K2 Asset with a short position of Austco Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Austco Healthcare.
Diversification Opportunities for K2 Asset and Austco Healthcare
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAM and Austco is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Austco Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austco Healthcare and K2 Asset 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 K2 Asset Management are associated (or correlated) with Austco Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austco Healthcare has no effect on the direction of K2 Asset i.e., K2 Asset and Austco Healthcare go up and down completely randomly.
Pair Corralation between K2 Asset and Austco Healthcare
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 1.16 times more return on investment than Austco Healthcare. However, K2 Asset is 1.16 times more volatile than Austco Healthcare. It trades about 0.2 of its potential returns per unit of risk. Austco Healthcare is currently generating about -0.03 per unit of risk. If you would invest 6.60 in K2 Asset Management on November 28, 2024 and sell it today you would earn a total of 1.10 from holding K2 Asset Management or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
K2 Asset Management vs. Austco Healthcare
Performance |
| Timeline |
| K2 Asset Management |
| Austco Healthcare |
K2 Asset and Austco Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Austco Healthcare
The main advantage of trading using opposite K2 Asset and Austco Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, Austco Healthcare 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 Austco Healthcare will offset losses from the drop in Austco Healthcare's long position.| K2 Asset vs. Polymetals Resources | K2 Asset vs. Clime Investment Management | K2 Asset vs. BKI Investment | K2 Asset vs. Perseus Mining |
| Austco Healthcare vs. Carlton Investments | Austco Healthcare vs. AiMedia Technologies | Austco Healthcare vs. Retail Food Group | Austco Healthcare vs. K2 Asset Management |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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