Correlation Between Australia and Kinatico
Can any of the company-specific risk be diversified away by investing in both Australia and Kinatico 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 Australia and Kinatico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australia and New and Kinatico, you can compare the effects of market volatilities on Australia and Kinatico 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 Australia with a short position of Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australia and Kinatico.
Diversification Opportunities for Australia and Kinatico
Poor diversification
The 3 months correlation between Australia and Kinatico is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Australia and New and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico and Australia 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 Australia and New are associated (or correlated) with Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of Australia i.e., Australia and Kinatico go up and down completely randomly.
Pair Corralation between Australia and Kinatico
Assuming the 90 days trading horizon Australia is expected to generate 16.22 times less return on investment than Kinatico. But when comparing it to its historical volatility, Australia and New is 4.79 times less risky than Kinatico. It trades about 0.03 of its potential returns per unit of risk. Kinatico is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Kinatico on September 7, 2024 and sell it today you would earn a total of 3.00 from holding Kinatico or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Australia and New vs. Kinatico
Performance |
Timeline |
Australia and New |
Kinatico |
Australia and Kinatico Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Australia and Kinatico
The main advantage of trading using opposite Australia and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australia position performs unexpectedly, Kinatico 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 Kinatico will offset losses from the drop in Kinatico's long position.Australia vs. M3 Mining | Australia vs. Perseus Mining | Australia vs. MetalsGrove Mining | Australia vs. Truscott Mining Corp |
Kinatico vs. Advanced Braking Technology | Kinatico vs. Clime Investment Management | Kinatico vs. Flagship Investments | Kinatico vs. Premier Investments |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |