Correlation Between Kip McGrath and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources NL, you can compare the effects of market volatilities on Kip McGrath and Sandfire Resources 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 Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Sandfire Resources.
Diversification Opportunities for Kip McGrath and Sandfire Resources
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kip and Sandfire is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Sandfire Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Kip McGrath i.e., Kip McGrath and Sandfire Resources go up and down completely randomly.
Pair Corralation between Kip McGrath and Sandfire Resources
Assuming the 90 days trading horizon Kip McGrath is expected to generate 2.77 times less return on investment than Sandfire Resources. In addition to that, Kip McGrath is 1.69 times more volatile than Sandfire Resources NL. It trades about 0.02 of its total potential returns per unit of risk. Sandfire Resources NL is currently generating about 0.07 per unit of volatility. If you would invest 713.00 in Sandfire Resources NL on November 3, 2024 and sell it today you would earn a total of 288.00 from holding Sandfire Resources NL or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Sandfire Resources NL
Performance |
| Timeline |
| Kip McGrath Education |
| Sandfire Resources |
Kip McGrath and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Sandfire Resources
The main advantage of trading using opposite Kip McGrath and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Sandfire Resources 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' long position.| Kip McGrath vs. MetalsGrove Mining | Kip McGrath vs. Black Rock Mining | Kip McGrath vs. Chalice Mining Limited | Kip McGrath vs. Collins Foods |
| Sandfire Resources vs. Pinnacle Investment Management | Sandfire Resources vs. Ras Technology Holdings | Sandfire Resources vs. Hansen Technologies | Sandfire Resources vs. Kkr Credit Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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