Correlation Between Kip McGrath and Australia

Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Australia 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 Australia 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 Australia and New, you can compare the effects of market volatilities on Kip McGrath and Australia 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 Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Australia.

Diversification Opportunities for Kip McGrath and Australia

-0.47

Correlation Coefficient

Kip McGrath  Australia

Very good diversification

The 3 months correlation between Kip and Australia is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Australia and New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australia and New 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 Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australia and New has no effect on the direction of Kip McGrath i.e., Kip McGrath and Australia go up and down completely randomly.

Pair Corralation between Kip McGrath and Australia

Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the Australia. In addition to that, Kip McGrath is 1.62 times more volatile than Australia and New. It trades about -0.01 of its total potential returns per unit of risk. Australia and New is currently generating about 0.04 per unit of volatility. If you would invest  2,860  in Australia and New on December 22, 2024 and sell it today you would earn a total of  70.00  from holding Australia and New or generate 2.45% return on investment over 90 days.

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

Kip McGrath Education  vs.  Australia and New

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.

Australia and New

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Australia and New are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Australia 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 Kip McGrath and Australia

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

The idea behind Kip McGrath Education and Australia and New 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.