Correlation Between Kip McGrath and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Viva Leisure 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 Viva Leisure 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 Viva Leisure, you can compare the effects of market volatilities on Kip McGrath and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Viva Leisure.
Diversification Opportunities for Kip McGrath and Viva Leisure
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kip and Viva is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Kip McGrath i.e., Kip McGrath and Viva Leisure go up and down completely randomly.
Pair Corralation between Kip McGrath and Viva Leisure
Assuming the 90 days trading horizon Kip McGrath Education is expected to generate 1.95 times more return on investment than Viva Leisure. However, Kip McGrath is 1.95 times more volatile than Viva Leisure. It trades about 0.01 of its potential returns per unit of risk. Viva Leisure is currently generating about 0.01 per unit of risk. If you would invest 50.00 in Kip McGrath Education on August 25, 2024 and sell it today you would lose (4.00) from holding Kip McGrath Education or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Viva Leisure
Performance |
| Timeline |
| Kip McGrath Education |
| Viva Leisure |
Kip McGrath and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Viva Leisure
The main advantage of trading using opposite Kip McGrath and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure'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 |
| Viva Leisure vs. Richmond Vanadium Technology | Viva Leisure vs. Dexus Convenience Retail | Viva Leisure vs. Retail Food Group | Viva Leisure vs. Janison Education Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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