Correlation Between K2 Asset and Thorney Technologies
Can any of the company-specific risk be diversified away by investing in both K2 Asset and Thorney Technologies 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 Thorney Technologies 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 Thorney Technologies, you can compare the effects of market volatilities on K2 Asset and Thorney Technologies 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 Thorney Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Thorney Technologies.
Diversification Opportunities for K2 Asset and Thorney Technologies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KAM and Thorney is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Thorney Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thorney Technologies 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 Thorney Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thorney Technologies has no effect on the direction of K2 Asset i.e., K2 Asset and Thorney Technologies go up and down completely randomly.
Pair Corralation between K2 Asset and Thorney Technologies
Assuming the 90 days trading horizon K2 Asset Management is expected to under-perform the Thorney Technologies. But the stock apears to be less risky and, when comparing its historical volatility, K2 Asset Management is 2.86 times less risky than Thorney Technologies. The stock trades about -0.22 of its potential returns per unit of risk. The Thorney Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Thorney Technologies on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Thorney Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Thorney Technologies
Performance |
| Timeline |
| K2 Asset Management |
| Thorney Technologies |
K2 Asset and Thorney Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Thorney Technologies
The main advantage of trading using opposite K2 Asset and Thorney Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, Thorney Technologies 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 Thorney Technologies will offset losses from the drop in Thorney Technologies' long position.| K2 Asset vs. ABACUS STORAGE KING | K2 Asset vs. AiMedia Technologies | K2 Asset vs. Sky Metals | K2 Asset vs. Southern Cross Media |
| Thorney Technologies vs. Hotel Property Investments | Thorney Technologies vs. Navigator Global Investments | Thorney Technologies vs. K2 Asset Management | Thorney Technologies vs. Collins Foods |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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