Correlation Between KTAM SET and BCAP SET100

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

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

Diversification Opportunities for KTAM SET and BCAP SET100

0.0

Correlation Coefficient

KTAM SET  BCAP SET100

Pay attention - limited upside

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

Pair Corralation between KTAM SET and BCAP SET100

If you would invest (100.00) in KTAM SET ICT on October 7, 2024 and sell it today you would earn a total of  100.00  from holding KTAM SET ICT 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

KTAM SET ICT  vs.  BCAP SET100

KTAM SET ICT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTAM SET ICT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, KTAM SET is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

BCAP SET100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCAP SET100 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BCAP SET100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KTAM SET and BCAP SET100

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

The idea behind KTAM SET ICT and BCAP SET100 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.