Correlation Between Champion Iron and Kinatico
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and Kinatico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Kinatico, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Kinatico.
Diversification Opportunities for Champion Iron and Kinatico
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Kinatico is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico and Champion Iron 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 Champion Iron 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 Champion Iron i.e., Champion Iron and Kinatico go up and down completely randomly.
Pair Corralation between Champion Iron and Kinatico
Assuming the 90 days trading horizon Champion Iron is expected to generate 1.32 times less return on investment than Kinatico. But when comparing it to its historical volatility, Champion Iron is 1.54 times less risky than Kinatico. It trades about 0.09 of its potential returns per unit of risk. Kinatico is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Kinatico on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Kinatico or generate 16.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Champion Iron vs. Kinatico
Performance |
Timeline |
Champion Iron |
Kinatico |
Champion Iron and Kinatico Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Champion Iron and Kinatico
The main advantage of trading using opposite Champion Iron and Kinatico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.Champion Iron vs. Apiam Animal Health | Champion Iron vs. Group 6 Metals | Champion Iron vs. Black Rock Mining | Champion Iron vs. Sonic Healthcare |
Kinatico vs. Carnegie Clean Energy | Kinatico vs. Collins Foods | Kinatico vs. Autosports Group | Kinatico vs. Carlton 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |