Correlation Between Kip McGrath and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and ANZ Group 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 Kip McGrath and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kip McGrath Education and ANZ Group Holdings, you can compare the effects of market volatilities on Kip McGrath and ANZ Group 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 Kip McGrath with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and ANZ Group.
Diversification Opportunities for Kip McGrath and ANZ Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kip and ANZ is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Kip McGrath 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 Kip McGrath Education are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Kip McGrath i.e., Kip McGrath and ANZ Group go up and down completely randomly.
Pair Corralation between Kip McGrath and ANZ Group
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 2.43 times more return on investment than ANZ Group. However, Kip McGrath is 2.43 times more volatile than ANZ Group Holdings. It trades about 0.29 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.0 per unit of risk. If you would invest 43.00 in Kip McGrath Education on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Kip McGrath Education or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. ANZ Group Holdings
Performance |
| Timeline |
| Kip McGrath Education |
| ANZ Group Holdings |
Kip McGrath and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and ANZ Group
The main advantage of trading using opposite Kip McGrath and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Kip McGrath vs. National Australia Bank | Kip McGrath vs. National Australia Bank | Kip McGrath vs. Westpac Banking | Kip McGrath vs. National Australia Bank |
| ANZ Group vs. MetalsGrove Mining | ANZ Group vs. Australian Unity Office | ANZ Group vs. Lendlease Group | ANZ Group vs. Kip McGrath Education |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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