Correlation Between Archrock and Kibush Capital

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Can any of the company-specific risk be diversified away by investing in both Archrock and Kibush Capital 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 Archrock and Kibush Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archrock and Kibush Capital Corp, you can compare the effects of market volatilities on Archrock and Kibush Capital 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 Archrock with a short position of Kibush Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archrock and Kibush Capital.

Diversification Opportunities for Archrock and Kibush Capital

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Archrock and Kibush is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Archrock and Kibush Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kibush Capital Corp and Archrock 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 Archrock are associated (or correlated) with Kibush Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kibush Capital Corp has no effect on the direction of Archrock i.e., Archrock and Kibush Capital go up and down completely randomly.

Pair Corralation between Archrock and Kibush Capital

Given the investment horizon of 90 days Archrock is expected to generate 0.1 times more return on investment than Kibush Capital. However, Archrock is 10.09 times less risky than Kibush Capital. It trades about 0.3 of its potential returns per unit of risk. Kibush Capital Corp is currently generating about 0.02 per unit of risk. If you would invest  721.00  in Archrock on August 29, 2022 and sell it today you would earn a total of  129.00  from holding Archrock or generate 17.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Archrock  vs.  Kibush Capital Corp

 Performance (%) 
       Timeline  
Archrock 
Archrock Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Archrock are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Archrock may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Archrock Price Channel

Kibush Capital Corp 
Kibush Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kibush Capital Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Kibush Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Kibush Price Channel

Archrock and Kibush Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Archrock and Kibush Capital

The main advantage of trading using opposite Archrock and Kibush Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archrock position performs unexpectedly, Kibush Capital 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 Kibush Capital will offset losses from the drop in Kibush Capital's long position.
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The idea behind Archrock and Kibush Capital Corp 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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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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