Correlation Between Kip McGrath and Champion Iron
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Champion Iron 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 Champion Iron 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 Champion Iron, you can compare the effects of market volatilities on Kip McGrath and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Champion Iron.
Diversification Opportunities for Kip McGrath and Champion Iron
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kip and Champion is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Kip McGrath i.e., Kip McGrath and Champion Iron go up and down completely randomly.
Pair Corralation between Kip McGrath and Champion Iron
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 1.43 times more return on investment than Champion Iron. However, Kip McGrath is 1.43 times more volatile than Champion Iron. It trades about 0.08 of its potential returns per unit of risk. Champion Iron is currently generating about -0.05 per unit of risk. If you would invest 30.00 in Kip McGrath Education on August 25, 2024 and sell it today you would earn a total of 16.00 from holding Kip McGrath Education or generate 53.33% 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. Champion Iron
Performance |
| Timeline |
| Kip McGrath Education |
| Champion Iron |
Kip McGrath and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Champion Iron
The main advantage of trading using opposite Kip McGrath and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. BHP Group Limited | Kip McGrath vs. Rio Tinto | Kip McGrath vs. Macquarie Group Ltd |
| Champion Iron vs. Eagle Mountain Mining | Champion Iron vs. Charter Hall Education | Champion Iron vs. Kip McGrath Education | Champion Iron vs. Mayfield Childcare |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |