Correlation Between Kip McGrath and Avenira

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

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

Diversification Opportunities for Kip McGrath and Avenira

-0.1

Correlation Coefficient

Kip McGrath  Avenira

Good diversification

The 3 months correlation between Kip and Avenira is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Avenira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avenira and Kip McGrath 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 Kip McGrath Education are associated (or correlated) with Avenira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avenira has no effect on the direction of Kip McGrath i.e., Kip McGrath and Avenira go up and down completely randomly.

Pair Corralation between Kip McGrath and Avenira

Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the Avenira. But the stock apears to be less risky and, when comparing its historical volatility, Kip McGrath Education is 2.23 times less risky than Avenira. The stock trades about -0.01 of its potential returns per unit of risk. The Avenira is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1.90  in Avenira on October 11, 2024 and sell it today you would lose (1.10) from holding Avenira or give up 57.89% of portfolio value over 90 days.

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

Kip McGrath Education  vs.  Avenira

Kip McGrath Education

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kip McGrath Education are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Kip McGrath unveiled solid returns over the last few months and may actually be approaching a breakup point.

Avenira

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avenira 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kip McGrath and Avenira

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

The idea behind Kip McGrath Education and Avenira 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.