Correlation Between K2 Asset and XTC Lithium
Can any of the company-specific risk be diversified away by investing in both K2 Asset and XTC Lithium 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 XTC Lithium 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 XTC Lithium Limited, you can compare the effects of market volatilities on K2 Asset and XTC Lithium 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 XTC Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and XTC Lithium.
Diversification Opportunities for K2 Asset and XTC Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KAM and XTC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and XTC Lithium Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTC Lithium Limited 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 XTC Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTC Lithium Limited has no effect on the direction of K2 Asset i.e., K2 Asset and XTC Lithium go up and down completely randomly.
Pair Corralation between K2 Asset and XTC Lithium
If you would invest 5.00 in K2 Asset Management on September 4, 2024 and sell it today you would earn a total of 2.40 from holding K2 Asset Management or generate 48.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
K2 Asset Management vs. XTC Lithium Limited
Performance |
| Timeline |
| K2 Asset Management |
| XTC Lithium Limited |
K2 Asset and XTC Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and XTC Lithium
The main advantage of trading using opposite K2 Asset and XTC Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset position performs unexpectedly, XTC Lithium 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 XTC Lithium will offset losses from the drop in XTC Lithium's long position.| K2 Asset vs. Westpac Banking | K2 Asset vs. Ecofibre | K2 Asset vs. Adriatic Metals Plc | K2 Asset vs. Australian Dairy Farms |
| XTC Lithium vs. Bailador Technology Invest | XTC Lithium vs. TPG Telecom | XTC Lithium vs. Black Rock Mining | XTC Lithium vs. K2 Asset Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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