Correlation Between Kindom Construction and Kee Tai

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

By analyzing existing cross correlation between Kindom Construction Corp and Kee Tai Properties, you can compare the effects of market volatilities on Kindom Construction and Kee Tai 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 Kindom Construction with a short position of Kee Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and Kee Tai.

Diversification Opportunities for Kindom Construction and Kee Tai

0.0

Correlation Coefficient

Kindom Construction  Kee Tai

Pay attention - limited upside

The 3 months correlation between Kindom and Kee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and Kee Tai Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kee Tai Properties and Kindom Construction 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 Kindom Construction Corp are associated (or correlated) with Kee Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kee Tai Properties has no effect on the direction of Kindom Construction i.e., Kindom Construction and Kee Tai go up and down completely randomly.

Pair Corralation between Kindom Construction and Kee Tai

Assuming the 90 days trading horizon Kindom Construction Corp is expected to generate 1.01 times more return on investment than Kee Tai. However, Kindom Construction is 1.01 times more volatile than Kee Tai Properties. It trades about 0.07 of its potential returns per unit of risk. Kee Tai Properties is currently generating about 0.02 per unit of risk. If you would invest  2,721  in Kindom Construction Corp on October 11, 2024 and sell it today you would earn a total of  2,339  from holding Kindom Construction Corp or generate 85.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Kindom Construction Corp  vs.  Kee Tai Properties

Kindom Construction Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kindom Construction Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kindom Construction may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kee Tai Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kee Tai Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kindom Construction and Kee Tai

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

The idea behind Kindom Construction Corp and Kee Tai Properties 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.