Correlation Between Resource Base and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Resource Base and BKI Investment 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 Resource Base and BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Base and BKI Investment, you can compare the effects of market volatilities on Resource Base and BKI Investment 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 Resource Base with a short position of BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Base and BKI Investment.
Diversification Opportunities for Resource Base and BKI Investment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Resource and BKI is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Resource Base and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment and Resource Base 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 Resource Base are associated (or correlated) with BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Resource Base i.e., Resource Base and BKI Investment go up and down completely randomly.
Pair Corralation between Resource Base and BKI Investment
Assuming the 90 days trading horizon Resource Base is expected to generate 12.15 times more return on investment than BKI Investment. However, Resource Base is 12.15 times more volatile than BKI Investment. It trades about 0.02 of its potential returns per unit of risk. BKI Investment is currently generating about -0.07 per unit of risk. If you would invest 3.60 in Resource Base on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Resource Base or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Resource Base vs. BKI Investment
Performance |
| Timeline |
| Resource Base |
| BKI Investment |
Resource Base and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Base and BKI Investment
The main advantage of trading using opposite Resource Base and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Base position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Resource Base vs. BKI Investment | Resource Base vs. Clime Investment Management | Resource Base vs. Kneomedia | Resource Base vs. K2 Asset Management |
| BKI Investment vs. Australian Foundation Investment | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short | BKI Investment vs. Wam Leaders |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |