Correlation Between BCAP SET100 and KTAM SET50

Can any of the company-specific risk be diversified away by investing in both BCAP SET100 and KTAM SET50 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 BCAP SET100 and KTAM SET50 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BCAP SET100 and KTAM SET50 ETF, you can compare the effects of market volatilities on BCAP SET100 and KTAM SET50 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 BCAP SET100 with a short position of KTAM SET50. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCAP SET100 and KTAM SET50.

Diversification Opportunities for BCAP SET100 and KTAM SET50

0.0

Correlation Coefficient

BCAP SET100  KTAM SET50

Pay attention - limited upside

The 3 months correlation between BCAP and KTAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BCAP SET100 and KTAM SET50 ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTAM SET50 ETF and BCAP SET100 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 BCAP SET100 are associated (or correlated) with KTAM SET50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTAM SET50 ETF has no effect on the direction of BCAP SET100 i.e., BCAP SET100 and KTAM SET50 go up and down completely randomly.

Pair Corralation between BCAP SET100 and KTAM SET50

If you would invest (100.00) in KTAM SET50 ETF on December 22, 2024 and sell it today you would earn a total of  100.00  from holding KTAM SET50 ETF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BCAP SET100  vs.  KTAM SET50 ETF

BCAP SET100

Risk-Adjusted Performance

Very Weak

Over the last 90 days BCAP SET100 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

KTAM SET50 ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days KTAM SET50 ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, KTAM SET50 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BCAP SET100 and KTAM SET50

The main advantage of trading using opposite BCAP SET100 and KTAM SET50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCAP SET100 position performs unexpectedly, KTAM SET50 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 KTAM SET50 will offset losses from the drop in KTAM SET50's long position.

The idea behind BCAP SET100 and KTAM SET50 ETF 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.