Correlation Between Kip McGrath and CogState
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and CogState 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 CogState 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 CogState, you can compare the effects of market volatilities on Kip McGrath and CogState 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 CogState. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and CogState.
Diversification Opportunities for Kip McGrath and CogState
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kip and CogState is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and CogState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CogState 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 CogState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CogState has no effect on the direction of Kip McGrath i.e., Kip McGrath and CogState go up and down completely randomly.
Pair Corralation between Kip McGrath and CogState
Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the CogState. But the stock apears to be less risky and, when comparing its historical volatility, Kip McGrath Education is 1.93 times less risky than CogState. The stock trades about -0.07 of its potential returns per unit of risk. The CogState is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 109.00 in CogState on October 23, 2024 and sell it today you would earn a total of 6.00 from holding CogState or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kip McGrath Education vs. CogState
Performance |
| Timeline |
| Kip McGrath Education |
| CogState |
Kip McGrath and CogState Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and CogState
The main advantage of trading using opposite Kip McGrath and CogState positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, CogState 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 CogState will offset losses from the drop in CogState's long position.| Kip McGrath vs. Hotel Property Investments | Kip McGrath vs. Dynamic Drill And | Kip McGrath vs. Gtn | Kip McGrath vs. Nufarm |
| CogState vs. Evolution Mining | CogState vs. Clime Investment Management | CogState vs. Metro Mining | CogState vs. Rand Mining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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