Correlation Between Kiplin Metals and Highway 50
Can any of the company-specific risk be diversified away by investing in both Kiplin Metals and Highway 50 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 Kiplin Metals and Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiplin Metals and Highway 50 Gold, you can compare the effects of market volatilities on Kiplin Metals and Highway 50 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 Kiplin Metals with a short position of Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiplin Metals and Highway 50.
Diversification Opportunities for Kiplin Metals and Highway 50
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kiplin and Highway is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kiplin Metals and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold and Kiplin Metals 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 Kiplin Metals are associated (or correlated) with Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Kiplin Metals i.e., Kiplin Metals and Highway 50 go up and down completely randomly.
Pair Corralation between Kiplin Metals and Highway 50
Assuming the 90 days horizon Kiplin Metals is expected to generate 25.56 times less return on investment than Highway 50. But when comparing it to its historical volatility, Kiplin Metals is 4.88 times less risky than Highway 50. It trades about 0.03 of its potential returns per unit of risk. Highway 50 Gold is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Highway 50 Gold on December 1, 2024 and sell it today you would earn a total of 10.00 from holding Highway 50 Gold or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiplin Metals vs. Highway 50 Gold
Performance |
| Timeline |
| Kiplin Metals |
| Highway 50 Gold |
Kiplin Metals and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiplin Metals and Highway 50
The main advantage of trading using opposite Kiplin Metals and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiplin Metals position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.| Kiplin Metals vs. Arbor Metals Corp | Kiplin Metals vs. Marvel Discovery Corp | Kiplin Metals vs. Fission 30 Corp |
| Highway 50 vs. Guru Organic Energy | Highway 50 vs. Sun Peak Metals | Highway 50 vs. Maple Leaf Foods | Highway 50 vs. Chemtrade Logistics Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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