Correlation Between K2 Asset and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both K2 Asset and Lykos 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 Lykos 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 Lykos Metals, you can compare the effects of market volatilities on K2 Asset and Lykos 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 Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Lykos Metals.
Diversification Opportunities for K2 Asset and Lykos Metals
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KAM and Lykos is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos 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 Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of K2 Asset i.e., K2 Asset and Lykos Metals go up and down completely randomly.
Pair Corralation between K2 Asset and Lykos Metals
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 0.92 times more return on investment than Lykos Metals. However, K2 Asset Management is 1.09 times less risky than Lykos Metals. It trades about 0.05 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.05 per unit of risk. If you would invest 3.71 in K2 Asset Management on November 1, 2024 and sell it today you would earn a total of 3.59 from holding K2 Asset Management or generate 96.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
K2 Asset Management vs. Lykos Metals
Performance |
| Timeline |
| K2 Asset Management |
| Lykos Metals |
K2 Asset and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Lykos Metals
The main advantage of trading using opposite K2 Asset and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, Lykos 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 Lykos Metals will offset losses from the drop in Lykos Metals' long position.| K2 Asset vs. Aspire Mining | K2 Asset vs. Ora Banda Mining | K2 Asset vs. Centuria Industrial Reit | K2 Asset vs. Truscott Mining Corp |
| Lykos Metals vs. Regis Healthcare | Lykos Metals vs. A1 Investments Resources | Lykos Metals vs. Sandon Capital Investments | Lykos Metals vs. Argo 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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