Correlation Between K2 Asset and Ironbark Capital
Can any of the company-specific risk be diversified away by investing in both K2 Asset and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital, you can compare the effects of market volatilities on K2 Asset and Ironbark Capital 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 Ironbark Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Ironbark Capital.
Diversification Opportunities for K2 Asset and Ironbark Capital
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAM and Ironbark is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Ironbark Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironbark Capital 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 Ironbark Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironbark Capital has no effect on the direction of K2 Asset i.e., K2 Asset and Ironbark Capital go up and down completely randomly.
Pair Corralation between K2 Asset and Ironbark Capital
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 4.04 times more return on investment than Ironbark Capital. However, K2 Asset is 4.04 times more volatile than Ironbark Capital. It trades about 0.05 of its potential returns per unit of risk. Ironbark Capital is currently generating about 0.01 per unit of risk. If you would invest 4.06 in K2 Asset Management on November 8, 2024 and sell it today you would earn a total of 3.64 from holding K2 Asset Management or generate 89.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Ironbark Capital
Performance |
| Timeline |
| K2 Asset Management |
| Ironbark Capital |
K2 Asset and Ironbark Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Ironbark Capital
The main advantage of trading using opposite K2 Asset and Ironbark Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, Ironbark Capital 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 Ironbark Capital will offset losses from the drop in Ironbark Capital's long position.| K2 Asset vs. Vitura Health Limited | K2 Asset vs. Advanced Braking Technology | K2 Asset vs. Regis Healthcare | K2 Asset vs. EROAD |
| Ironbark Capital vs. Iron Road | Ironbark Capital vs. Saferoads Holdings | Ironbark Capital vs. BKI Investment | Ironbark Capital vs. Auctus Alternative Investments |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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