Correlation Between Kopernik International and Aggressive Investors
Can any of the company-specific risk be diversified away by investing in both Kopernik International and Aggressive Investors 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 Kopernik International and Aggressive Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik International and Aggressive Investors 1, you can compare the effects of market volatilities on Kopernik International and Aggressive Investors 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 Kopernik International with a short position of Aggressive Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik International and Aggressive Investors.
Diversification Opportunities for Kopernik International and Aggressive Investors
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kopernik and Aggressive is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International and Aggressive Investors 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Investors and Kopernik International 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 Kopernik International are associated (or correlated) with Aggressive Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Investors has no effect on the direction of Kopernik International i.e., Kopernik International and Aggressive Investors go up and down completely randomly.
Pair Corralation between Kopernik International and Aggressive Investors
Assuming the 90 days horizon Kopernik International is expected to generate 27.52 times less return on investment than Aggressive Investors. But when comparing it to its historical volatility, Kopernik International is 1.69 times less risky than Aggressive Investors. It trades about 0.0 of its potential returns per unit of risk. Aggressive Investors 1 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,400 in Aggressive Investors 1 on December 5, 2024 and sell it today you would earn a total of 1,166 from holding Aggressive Investors 1 or generate 13.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kopernik International vs. Aggressive Investors 1
Performance |
Timeline |
Kopernik International |
Aggressive Investors |
Kopernik International and Aggressive Investors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kopernik International and Aggressive Investors
The main advantage of trading using opposite Kopernik International and Aggressive Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik International position performs unexpectedly, Aggressive Investors 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 Aggressive Investors will offset losses from the drop in Aggressive Investors' long position.Kopernik International vs. Calvert Short Duration | Kopernik International vs. Rbc Short Duration | Kopernik International vs. Metropolitan West Ultra | Kopernik International vs. Barings Active Short |
Aggressive Investors vs. Versatile Bond Portfolio | Aggressive Investors vs. Doubleline Total Return | Aggressive Investors vs. Flexible Bond Portfolio | Aggressive Investors vs. Ab Bond Inflation |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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