Correlation Between Kip McGrath and Lottery
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Lottery 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 Lottery 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 Lottery, you can compare the effects of market volatilities on Kip McGrath and Lottery 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 Lottery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Lottery.
Diversification Opportunities for Kip McGrath and Lottery
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kip and Lottery is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Lottery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery 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 Lottery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery has no effect on the direction of Kip McGrath i.e., Kip McGrath and Lottery go up and down completely randomly.
Pair Corralation between Kip McGrath and Lottery
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 2.95 times more return on investment than Lottery. However, Kip McGrath is 2.95 times more volatile than Lottery. It trades about 0.12 of its potential returns per unit of risk. Lottery is currently generating about 0.04 per unit of risk. If you would invest 44.00 in Kip McGrath Education on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Kip McGrath Education or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Lottery
Performance |
| Timeline |
| Kip McGrath Education |
| Lottery |
Kip McGrath and Lottery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Lottery
The main advantage of trading using opposite Kip McGrath and Lottery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Lottery 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 Lottery will offset losses from the drop in Lottery's long position.| Kip McGrath vs. Aurelia Metals | Kip McGrath vs. MetalsGrove Mining | Kip McGrath vs. EROAD | Kip McGrath vs. Duxton Broadacre Farms |
| Lottery vs. Charter Hall Education | Lottery vs. Dexus Convenience Retail | Lottery vs. Sky Metals | Lottery vs. Kip McGrath Education |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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