Correlation Between BKI Investment and Aeon Metals

Can any of the company-specific risk be diversified away by investing in both BKI Investment and Aeon Metals 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 BKI Investment and Aeon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BKI Investment and Aeon Metals, you can compare the effects of market volatilities on BKI Investment and Aeon Metals 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 BKI Investment with a short position of Aeon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Aeon Metals.

Diversification Opportunities for BKI Investment and Aeon Metals

0.0

Correlation Coefficient

BKI Investment  Aeon Metals

Pay attention - limited upside

The 3 months correlation between BKI and Aeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Aeon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Metals and BKI Investment 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 BKI Investment are associated (or correlated) with Aeon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Metals has no effect on the direction of BKI Investment i.e., BKI Investment and Aeon Metals go up and down completely randomly.

Pair Corralation between BKI Investment and Aeon Metals

If you would invest  170.00  in BKI Investment on September 4, 2024 and sell it today you would earn a total of  1.00  from holding BKI Investment or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

BKI Investment  vs.  Aeon Metals

BKI Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BKI Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, BKI Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aeon Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeon Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Aeon Metals 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 BKI Investment and Aeon Metals

The main advantage of trading using opposite BKI Investment and Aeon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment position performs unexpectedly, Aeon Metals 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 Aeon Metals will offset losses from the drop in Aeon Metals' long position.

The idea behind BKI Investment and Aeon Metals 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.