Correlation Between ABACUS STORAGE and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE 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 ABACUS STORAGE and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Kip McGrath Education, you can compare the effects of market volatilities on ABACUS STORAGE 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 ABACUS STORAGE with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Kip McGrath.
Diversification Opportunities for ABACUS STORAGE and Kip McGrath
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABACUS and Kip is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING 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 ABACUS STORAGE 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 ABACUS STORAGE KING 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 ABACUS STORAGE i.e., ABACUS STORAGE and Kip McGrath go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Kip McGrath
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 17.21 times more return on investment than Kip McGrath. However, ABACUS STORAGE is 17.21 times more volatile than Kip McGrath Education. It trades about 0.06 of its potential returns per unit of risk. Kip McGrath Education is currently generating about 0.03 per unit of risk. If you would invest 110.00 in ABACUS STORAGE KING on September 24, 2024 and sell it today you would earn a total of 5.00 from holding ABACUS STORAGE KING or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
ABACUS STORAGE KING vs. Kip McGrath Education
Performance |
Timeline |
ABACUS STORAGE KING |
Kip McGrath Education |
ABACUS STORAGE and Kip McGrath Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ABACUS STORAGE and Kip McGrath
The main advantage of trading using opposite ABACUS STORAGE and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE 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.ABACUS STORAGE vs. Auctus Alternative Investments | ABACUS STORAGE vs. Zoom2u Technologies | ABACUS STORAGE vs. MFF Capital Investments | ABACUS STORAGE vs. Ras Technology Holdings |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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