Correlation Between K2 Asset and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both K2 Asset and Centaurus Metals 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 Centaurus Metals 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 Centaurus Metals, you can compare the effects of market volatilities on K2 Asset and Centaurus Metals 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 Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Centaurus Metals.
Diversification Opportunities for K2 Asset and Centaurus Metals
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KAM and Centaurus is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals 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 Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of K2 Asset i.e., K2 Asset and Centaurus Metals go up and down completely randomly.
Pair Corralation between K2 Asset and Centaurus Metals
Assuming the 90 days trading horizon K2 Asset Management is expected to under-perform the Centaurus Metals. But the stock apears to be less risky and, when comparing its historical volatility, K2 Asset Management is 3.18 times less risky than Centaurus Metals. The stock trades about -0.22 of its potential returns per unit of risk. The Centaurus Metals is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Centaurus Metals on October 17, 2024 and sell it today you would lose (2.00) from holding Centaurus Metals or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Centaurus Metals
Performance |
| Timeline |
| K2 Asset Management |
| Centaurus Metals |
K2 Asset and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Centaurus Metals
The main advantage of trading using opposite K2 Asset and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| K2 Asset vs. FireFly Metals | K2 Asset vs. Dalaroo Metals | K2 Asset vs. Hammer Metals | K2 Asset vs. Centrex Metals |
| Centaurus Metals vs. AiMedia Technologies | Centaurus Metals vs. Super Retail Group | Centaurus Metals vs. Centrex Metals | Centaurus Metals vs. Falcon Metals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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