Correlation Between Kip McGrath and Wildcat Resources

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

Diversification Opportunities for Kip McGrath and Wildcat Resources

-0.89

Correlation Coefficient

Kip McGrath  Wildcat Resources

Pay attention - limited upside

The 3 months correlation between Kip and Wildcat is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Wildcat Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildcat Resources 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 Wildcat Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildcat Resources has no effect on the direction of Kip McGrath i.e., Kip McGrath and Wildcat Resources go up and down completely randomly.

Pair Corralation between Kip McGrath and Wildcat Resources

Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the Wildcat Resources. But the stock apears to be less risky and, when comparing its historical volatility, Kip McGrath Education is 4.37 times less risky than Wildcat Resources. The stock trades about -0.38 of its potential returns per unit of risk. The Wildcat Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Wildcat Resources on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Wildcat Resources or generate 13.04% return on investment over 90 days.

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

Kip McGrath Education  vs.  Wildcat Resources

Kip McGrath Education

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kip McGrath Education are ranked lower than 8 (%) 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.

Wildcat Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wildcat Resources 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 Wildcat Resources

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

The idea behind Kip McGrath Education and Wildcat Resources 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.