Correlation Between Australian Strategic and Kip McGrath

Can any of the company-specific risk be diversified away by investing in both Australian Strategic 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 Australian Strategic and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Australian Strategic Materials and Kip McGrath Education, you can compare the effects of market volatilities on Australian Strategic 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 Australian Strategic with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Strategic and Kip McGrath.

Diversification Opportunities for Australian Strategic and Kip McGrath

-0.24

Correlation Coefficient

Australian Strategic  Kip McGrath

Very good diversification

The 3 months correlation between Australian and Kip is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Australian Strategic Materials 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 Australian Strategic 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 Australian Strategic Materials 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 Australian Strategic i.e., Australian Strategic and Kip McGrath go up and down completely randomly.

Pair Corralation between Australian Strategic and Kip McGrath

Assuming the 90 days trading horizon Australian Strategic Materials is expected to under-perform the Kip McGrath. In addition to that, Australian Strategic is 1.46 times more volatile than Kip McGrath Education. It trades about -0.14 of its total potential returns per unit of risk. Kip McGrath Education is currently generating about 0.01 per unit of volatility. If you would invest  46.00  in Kip McGrath Education on December 24, 2024 and sell it today you would earn a total of  0.00  from holding Kip McGrath Education or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Australian Strategic Materials  vs.  Kip McGrath Education

Australian Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Australian Strategic Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kip McGrath Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kip McGrath Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Kip McGrath is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Australian Strategic and Kip McGrath

The main advantage of trading using opposite Australian Strategic and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Strategic 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.

The idea behind Australian Strategic Materials and Kip McGrath Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.