Correlation Between Kip McGrath and G8 Education
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and G8 Education 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 G8 Education 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 G8 Education, you can compare the effects of market volatilities on Kip McGrath and G8 Education 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 G8 Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and G8 Education.
Diversification Opportunities for Kip McGrath and G8 Education
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kip and GEM is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and G8 Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G8 Education 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 G8 Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G8 Education has no effect on the direction of Kip McGrath i.e., Kip McGrath and G8 Education go up and down completely randomly.
Pair Corralation between Kip McGrath and G8 Education
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 2.15 times more return on investment than G8 Education. However, Kip McGrath is 2.15 times more volatile than G8 Education. It trades about 0.1 of its potential returns per unit of risk. G8 Education is currently generating about 0.05 per unit of risk. If you would invest 30.00 in Kip McGrath Education on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Kip McGrath Education or generate 73.33% 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. G8 Education
Performance |
| Timeline |
| Kip McGrath Education |
| G8 Education |
Kip McGrath and G8 Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and G8 Education
The main advantage of trading using opposite Kip McGrath and G8 Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, G8 Education 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 G8 Education will offset losses from the drop in G8 Education's long position.| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. Macquarie Group | Kip McGrath vs. Macquarie Group Ltd | Kip McGrath vs. Challenger |
| G8 Education vs. Aneka Tambang Tbk | G8 Education vs. Macquarie Group | G8 Education vs. Macquarie Group Ltd | G8 Education vs. Challenger |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |