Correlation Between K2 Asset and British Amer
Can any of the company-specific risk be diversified away by investing in both K2 Asset and British Amer 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 British Amer 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 Bailador Technology Invest, you can compare the effects of market volatilities on K2 Asset and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and British Amer.
Diversification Opportunities for K2 Asset and British Amer
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KAM and British is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of K2 Asset i.e., K2 Asset and British Amer go up and down completely randomly.
Pair Corralation between K2 Asset and British Amer
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 5.34 times more return on investment than British Amer. However, K2 Asset is 5.34 times more volatile than Bailador Technology Invest. It trades about 0.38 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about -0.04 per unit of risk. If you would invest 5.00 in K2 Asset Management on September 3, 2024 and sell it today you would earn a total of 2.00 from holding K2 Asset Management or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Bailador Technology Invest
Performance |
| Timeline |
| K2 Asset Management |
| Bailador Technology |
K2 Asset and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and British Amer
The main advantage of trading using opposite K2 Asset and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.The idea behind K2 Asset Management and Bailador Technology Invest 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.| British Amer vs. Audio Pixels Holdings | British Amer vs. Iodm | British Amer vs. Nsx | British Amer vs. TTG Fintech |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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