Correlation Between Kibush Capital and Alfi

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

Diversification Opportunities for Kibush Capital and Alfi

0.34
  Correlation Coefficient

Weak diversification

The 1 month correlation between Kibush and Alfi is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kibush Capital Corp and Alfi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfi Inc and Kibush Capital 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 Kibush Capital Corp are associated (or correlated) with Alfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfi Inc has no effect on the direction of Kibush Capital i.e., Kibush Capital and Alfi go up and down completely randomly.

Pair Corralation between Kibush Capital and Alfi

Given the investment horizon of 90 days Kibush Capital is expected to generate 32.87 times less return on investment than Alfi. But when comparing it to its historical volatility, Kibush Capital Corp is 4.3 times less risky than Alfi. It trades about 0.01 of its potential returns per unit of risk. Alfi Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  302.00  in Alfi Inc on September 3, 2022 and sell it today you would lose (297.58)  from holding Alfi Inc or give up 98.54% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Kibush Capital Corp  vs.  Alfi Inc

 Performance (%) 
       Timeline  
Kibush Capital Corp 
Kibush Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kibush Capital Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Kibush Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Kibush Price Channel

Alfi Inc 
Alfi Performance
0 of 100
Over the last 90 days Alfi Inc 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 essential indicators remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alfi Price Channel

Kibush Capital and Alfi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kibush Capital and Alfi

The main advantage of trading using opposite Kibush Capital and Alfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kibush Capital position performs unexpectedly, Alfi 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 Alfi will offset losses from the drop in Alfi's long position.
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The idea behind Kibush Capital Corp and Alfi Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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