Correlation Between K2 Asset and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both K2 Asset and REGAL ASIAN 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on K2 Asset and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and REGAL ASIAN.
Diversification Opportunities for K2 Asset and REGAL ASIAN
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KAM and REGAL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of K2 Asset i.e., K2 Asset and REGAL ASIAN go up and down completely randomly.
Pair Corralation between K2 Asset and REGAL ASIAN
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 4.71 times more return on investment than REGAL ASIAN. However, K2 Asset is 4.71 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.08 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.01 per unit of risk. If you would invest 4.70 in K2 Asset Management on September 2, 2024 and sell it today you would earn a total of 2.30 from holding K2 Asset Management or generate 48.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| K2 Asset Management |
| REGAL ASIAN INVESTMENTS |
K2 Asset and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and REGAL ASIAN
The main advantage of trading using opposite K2 Asset and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| K2 Asset vs. WA1 Resources | K2 Asset vs. Predictive Discovery | K2 Asset vs. Cooper Metals | K2 Asset vs. OD6 Metals |
| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Midway | REGAL ASIAN vs. Aristocrat Leisure | REGAL ASIAN vs. Imricor Medical Systems |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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