Correlation Between KSEC Intelligent and Tangel Publishing

Can any of the company-specific risk be diversified away by investing in both KSEC Intelligent and Tangel Publishing 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 KSEC Intelligent and Tangel Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KSEC Intelligent Technology and Tangel Publishing, you can compare the effects of market volatilities on KSEC Intelligent and Tangel Publishing 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 KSEC Intelligent with a short position of Tangel Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSEC Intelligent and Tangel Publishing.

Diversification Opportunities for KSEC Intelligent and Tangel Publishing

0.75

Correlation Coefficient

KSEC Intelligent  Tangel Publishing

Poor diversification

The 3 months correlation between KSEC and Tangel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KSEC Intelligent Technology and Tangel Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangel Publishing and KSEC Intelligent 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 KSEC Intelligent Technology are associated (or correlated) with Tangel Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangel Publishing has no effect on the direction of KSEC Intelligent i.e., KSEC Intelligent and Tangel Publishing go up and down completely randomly.

Pair Corralation between KSEC Intelligent and Tangel Publishing

Assuming the 90 days trading horizon KSEC Intelligent is expected to generate 2.89 times less return on investment than Tangel Publishing. But when comparing it to its historical volatility, KSEC Intelligent Technology is 2.15 times less risky than Tangel Publishing. It trades about 0.07 of its potential returns per unit of risk. Tangel Publishing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  388.00  in Tangel Publishing on December 25, 2024 and sell it today you would earn a total of  75.00  from holding Tangel Publishing or generate 19.33% return on investment over 90 days.

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

KSEC Intelligent Technology  vs.  Tangel Publishing

KSEC Intelligent Tec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KSEC Intelligent Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KSEC Intelligent may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tangel Publishing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tangel Publishing are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tangel Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KSEC Intelligent and Tangel Publishing

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

The idea behind KSEC Intelligent Technology and Tangel Publishing 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.