Correlation Between Kinatico and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Kinatico and ANZ Group 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 Kinatico and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinatico and ANZ Group Holdings, you can compare the effects of market volatilities on Kinatico and ANZ Group 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 Kinatico with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinatico and ANZ Group.
Diversification Opportunities for Kinatico and ANZ Group
Poor diversification
The 3 months correlation between Kinatico and ANZ is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinatico and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Kinatico 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 Kinatico are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Kinatico i.e., Kinatico and ANZ Group go up and down completely randomly.
Pair Corralation between Kinatico and ANZ Group
Assuming the 90 days trading horizon Kinatico is expected to generate 20.21 times more return on investment than ANZ Group. However, Kinatico is 20.21 times more volatile than ANZ Group Holdings. It trades about 0.13 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.11 per unit of risk. If you would invest 10.00 in Kinatico on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Kinatico or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinatico vs. ANZ Group Holdings
Performance |
| Timeline |
| Kinatico |
| ANZ Group Holdings |
Kinatico and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinatico and ANZ Group
The main advantage of trading using opposite Kinatico and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinatico position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Kinatico vs. Hotel Property Investments | Kinatico vs. Pinnacle Investment Management | Kinatico vs. Green Technology Metals | Kinatico vs. Actinogen Medical |
| ANZ Group vs. Stelar Metals | ANZ Group vs. Air New Zealand | ANZ Group vs. Magellan Financial Group | ANZ Group vs. 29Metals |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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