Correlation Between Kingsrose Mining and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both Kingsrose Mining and Vicinity Centres 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 Kingsrose Mining and Vicinity Centres into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsrose Mining and Vicinity Centres Re, you can compare the effects of market volatilities on Kingsrose Mining and Vicinity Centres 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 Kingsrose Mining with a short position of Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsrose Mining and Vicinity Centres.
Diversification Opportunities for Kingsrose Mining and Vicinity Centres
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingsrose and Vicinity is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kingsrose Mining and Vicinity Centres Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres and Kingsrose Mining 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 Kingsrose Mining are associated (or correlated) with Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of Kingsrose Mining i.e., Kingsrose Mining and Vicinity Centres go up and down completely randomly.
Pair Corralation between Kingsrose Mining and Vicinity Centres
Assuming the 90 days trading horizon Kingsrose Mining is expected to generate 2.04 times less return on investment than Vicinity Centres. In addition to that, Kingsrose Mining is 3.65 times more volatile than Vicinity Centres Re. It trades about 0.01 of its total potential returns per unit of risk. Vicinity Centres Re is currently generating about 0.07 per unit of volatility. If you would invest 178.00 in Vicinity Centres Re on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Vicinity Centres Re or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsrose Mining vs. Vicinity Centres Re
Performance |
| Timeline |
| Kingsrose Mining |
| Vicinity Centres |
Kingsrose Mining and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsrose Mining and Vicinity Centres
The main advantage of trading using opposite Kingsrose Mining and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsrose Mining position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| Kingsrose Mining vs. Northern Star Resources | Kingsrose Mining vs. Evolution Mining | Kingsrose Mining vs. Bluescope Steel | Kingsrose Mining vs. Sandfire Resources NL |
| Vicinity Centres vs. Queste Communications | Vicinity Centres vs. Charter Hall Retail | Vicinity Centres vs. Aussie Broadband | Vicinity Centres 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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