Correlation Between Leeuwin Metals and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Leeuwin Metals and Kip McGrath 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 Leeuwin Metals and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leeuwin Metals and Kip McGrath Education, you can compare the effects of market volatilities on Leeuwin Metals and Kip McGrath 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 Leeuwin Metals with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leeuwin Metals and Kip McGrath.
Diversification Opportunities for Leeuwin Metals and Kip McGrath
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leeuwin and Kip is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Leeuwin Metals and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and Leeuwin Metals 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 Leeuwin Metals are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Leeuwin Metals i.e., Leeuwin Metals and Kip McGrath go up and down completely randomly.
Pair Corralation between Leeuwin Metals and Kip McGrath
Assuming the 90 days trading horizon Leeuwin Metals is expected to generate 204.86 times less return on investment than Kip McGrath. But when comparing it to its historical volatility, Leeuwin Metals is 2.89 times less risky than Kip McGrath. It trades about 0.0 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Kip McGrath Education on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Kip McGrath Education or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Leeuwin Metals vs. Kip McGrath Education
Performance |
| Timeline |
| Leeuwin Metals |
| Kip McGrath Education |
Leeuwin Metals and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leeuwin Metals and Kip McGrath
The main advantage of trading using opposite Leeuwin Metals and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leeuwin Metals position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Leeuwin Metals vs. Northern Star Resources | Leeuwin Metals vs. Evolution Mining | Leeuwin Metals vs. Bluescope Steel | Leeuwin Metals vs. Sandfire Resources NL |
| Kip McGrath vs. National Australia Bank | Kip McGrath vs. National Australia Bank | Kip McGrath vs. Westpac Banking | Kip McGrath vs. National Australia Bank |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |