Correlation Between KGI Securities and CP ALL

Can any of the company-specific risk be diversified away by investing in both KGI Securities and CP ALL 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 KGI Securities and CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KGI Securities Public and CP ALL Public, you can compare the effects of market volatilities on KGI Securities and CP ALL 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 KGI Securities with a short position of CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and CP ALL.

Diversification Opportunities for KGI Securities and CP ALL

0.77

Correlation Coefficient

KGI Securities  CP ALL

Poor diversification

The 3 months correlation between KGI and CPALL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and KGI Securities 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 KGI Securities Public are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of KGI Securities i.e., KGI Securities and CP ALL go up and down completely randomly.

Pair Corralation between KGI Securities and CP ALL

Assuming the 90 days trading horizon KGI Securities Public is expected to generate 0.27 times more return on investment than CP ALL. However, KGI Securities Public is 3.73 times less risky than CP ALL. It trades about 0.05 of its potential returns per unit of risk. CP ALL Public is currently generating about -0.31 per unit of risk. If you would invest  422.00  in KGI Securities Public on October 4, 2024 and sell it today you would earn a total of  2.00  from holding KGI Securities Public or generate 0.47% return on investment over 90 days.

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

KGI Securities Public  vs.  CP ALL Public

KGI Securities Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KGI Securities Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, KGI Securities is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

CP ALL Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CP ALL 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 fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KGI Securities and CP ALL

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

The idea behind KGI Securities Public and CP ALL 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.