Correlation Between Keck Seng and Marriott International

Can any of the company-specific risk be diversified away by investing in both Keck Seng and Marriott International 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 Keck Seng and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Keck Seng Investments and Marriott International, you can compare the effects of market volatilities on Keck Seng and Marriott International 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 Keck Seng with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Marriott International.

Diversification Opportunities for Keck Seng and Marriott International

-0.37

Correlation Coefficient

Keck Seng  Marriott International

Very good diversification

The 3 months correlation between Keck and Marriott is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Keck Seng 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 Keck Seng Investments are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Keck Seng i.e., Keck Seng and Marriott International go up and down completely randomly.

Pair Corralation between Keck Seng and Marriott International

Assuming the 90 days horizon Keck Seng Investments is expected to generate 4.04 times more return on investment than Marriott International. However, Keck Seng is 4.04 times more volatile than Marriott International. It trades about 0.12 of its potential returns per unit of risk. Marriott International is currently generating about -0.04 per unit of risk. If you would invest  24.00  in Keck Seng Investments on October 26, 2024 and sell it today you would earn a total of  2.00  from holding Keck Seng Investments or generate 8.33% return on investment over 90 days.

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

Keck Seng Investments  vs.  Marriott International

Keck Seng Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keck Seng Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Keck Seng is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Marriott International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Marriott International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keck Seng and Marriott International

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

The idea behind Keck Seng Investments and Marriott International 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.