Correlation Between Kip McGrath and Iron Road
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Iron Road 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 Iron Road 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 Iron Road, you can compare the effects of market volatilities on Kip McGrath and Iron Road 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 Iron Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Iron Road.
Diversification Opportunities for Kip McGrath and Iron Road
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kip and Iron is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Iron Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Road 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 Iron Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Road has no effect on the direction of Kip McGrath i.e., Kip McGrath and Iron Road go up and down completely randomly.
Pair Corralation between Kip McGrath and Iron Road
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 0.56 times more return on investment than Iron Road. However, Kip McGrath Education is 1.79 times less risky than Iron Road. It trades about 0.27 of its potential returns per unit of risk. Iron Road is currently generating about 0.0 per unit of risk. If you would invest 41.00 in Kip McGrath Education on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Kip McGrath Education or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Iron Road
Performance |
| Timeline |
| Kip McGrath Education |
| Iron Road |
Kip McGrath and Iron Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Iron Road
The main advantage of trading using opposite Kip McGrath and Iron Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Iron Road 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 Iron Road will offset losses from the drop in Iron Road'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 |
| Iron Road vs. Super Retail Group | Iron Road vs. Sky Metals | Iron Road vs. Cleanaway Waste Management | Iron Road vs. Alto Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |