Correlation Between Kingsrose Mining and Xero
Can any of the company-specific risk be diversified away by investing in both Kingsrose Mining and Xero 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 Xero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsrose Mining and Xero, you can compare the effects of market volatilities on Kingsrose Mining and Xero 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 Xero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsrose Mining and Xero.
Diversification Opportunities for Kingsrose Mining and Xero
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingsrose and Xero is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kingsrose Mining and Xero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xero 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 Xero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xero has no effect on the direction of Kingsrose Mining i.e., Kingsrose Mining and Xero go up and down completely randomly.
Pair Corralation between Kingsrose Mining and Xero
Assuming the 90 days trading horizon Kingsrose Mining is expected to under-perform the Xero. In addition to that, Kingsrose Mining is 3.1 times more volatile than Xero. It trades about -0.04 of its total potential returns per unit of risk. Xero is currently generating about 0.4 per unit of volatility. If you would invest 15,000 in Xero on August 31, 2024 and sell it today you would earn a total of 2,385 from holding Xero or generate 15.9% 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. Xero
Performance |
| Timeline |
| Kingsrose Mining |
| Xero |
Kingsrose Mining and Xero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsrose Mining and Xero
The main advantage of trading using opposite Kingsrose Mining and Xero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsrose Mining position performs unexpectedly, Xero 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 Xero will offset losses from the drop in Xero's long position.| Kingsrose Mining vs. Auctus Alternative Investments | Kingsrose Mining vs. TTG Fintech | Kingsrose Mining vs. Australian Unity Office | Kingsrose Mining vs. Super Retail Group |
| Xero vs. Patriot Battery Metals | Xero vs. Stelar Metals | Xero vs. Centuria Industrial Reit | Xero vs. IDP 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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