Correlation Between Pact Group and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Pact Group 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 Pact Group and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pact Group Holdings and Kip McGrath Education, you can compare the effects of market volatilities on Pact Group 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 Pact Group with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pact Group and Kip McGrath.
Diversification Opportunities for Pact Group and Kip McGrath
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pact and Kip is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings 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 Pact Group 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 Pact Group Holdings 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 Pact Group i.e., Pact Group and Kip McGrath go up and down completely randomly.
Pair Corralation between Pact Group and Kip McGrath
Assuming the 90 days trading horizon Pact Group Holdings is expected to under-perform the Kip McGrath. But the stock apears to be less risky and, when comparing its historical volatility, Pact Group Holdings is 1.53 times less risky than Kip McGrath. The stock trades about -0.01 of its potential returns per unit of risk. The Kip McGrath Education is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Kip McGrath Education on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Kip McGrath Education or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pact Group Holdings vs. Kip McGrath Education
Performance |
| Timeline |
| Pact Group Holdings |
| Kip McGrath Education |
Pact Group and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pact Group and Kip McGrath
The main advantage of trading using opposite Pact Group and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group 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.| Pact Group vs. Mirrabooka Investments | Pact Group vs. Nova Eye Medical | Pact Group vs. MFF Capital Investments | Pact Group vs. Air New Zealand |
| Kip McGrath vs. Aneka Tambang Tbk | Kip McGrath vs. BHP Group Limited | Kip McGrath vs. Rio Tinto | Kip McGrath vs. Macquarie Group Ltd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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