Correlation Between K2 Asset and RLF AgTech
Can any of the company-specific risk be diversified away by investing in both K2 Asset and RLF AgTech 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 RLF AgTech 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 RLF AgTech, you can compare the effects of market volatilities on K2 Asset and RLF AgTech 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 RLF AgTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and RLF AgTech.
Diversification Opportunities for K2 Asset and RLF AgTech
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAM and RLF is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and RLF AgTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLF AgTech 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 RLF AgTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLF AgTech has no effect on the direction of K2 Asset i.e., K2 Asset and RLF AgTech go up and down completely randomly.
Pair Corralation between K2 Asset and RLF AgTech
Assuming the 90 days trading horizon K2 Asset Management is expected to generate 0.88 times more return on investment than RLF AgTech. However, K2 Asset Management is 1.13 times less risky than RLF AgTech. It trades about 0.17 of its potential returns per unit of risk. RLF AgTech is currently generating about -0.06 per unit of risk. If you would invest 5.00 in K2 Asset Management on September 2, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. RLF AgTech
Performance |
| Timeline |
| K2 Asset Management |
| RLF AgTech |
K2 Asset and RLF AgTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and RLF AgTech
The main advantage of trading using opposite K2 Asset and RLF AgTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, RLF AgTech 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 RLF AgTech will offset losses from the drop in RLF AgTech's long position.| K2 Asset vs. WA1 Resources | K2 Asset vs. Predictive Discovery | K2 Asset vs. Cooper Metals | K2 Asset vs. OD6 Metals |
| RLF AgTech vs. Clime Investment Management | RLF AgTech vs. Alto Metals | RLF AgTech vs. REGAL ASIAN INVESTMENTS | RLF AgTech vs. DY6 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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