Correlation Between KCE Electronics and Infraset Public

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

Diversification Opportunities for KCE Electronics and Infraset Public

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between KCE and Infraset is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and Infraset Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infraset Public and KCE Electronics 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 KCE Electronics Public are associated (or correlated) with Infraset Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infraset Public has no effect on the direction of KCE Electronics i.e., KCE Electronics and Infraset Public go up and down completely randomly.

Pair Corralation between KCE Electronics and Infraset Public

Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the Infraset Public. But the stock apears to be less risky and, when comparing its historical volatility, KCE Electronics Public is 18.73 times less risky than Infraset Public. The stock trades about -0.05 of its potential returns per unit of risk. The Infraset Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  326.00  in Infraset Public on October 5, 2024 and sell it today you would lose (16.00) from holding Infraset Public or give up 4.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

KCE Electronics Public  vs.  Infraset Public

 Performance 
       Timeline  
KCE Electronics Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KCE Electronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Infraset Public 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Infraset Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Infraset Public sustained solid returns over the last few months and may actually be approaching a breakup point.

KCE Electronics and Infraset Public Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KCE Electronics and Infraset Public

The main advantage of trading using opposite KCE Electronics and Infraset Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, Infraset Public 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 Infraset Public will offset losses from the drop in Infraset Public's long position.
The idea behind KCE Electronics Public and Infraset Public 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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