Correlation Between KGI Securities and Eastern Commercial
Can any of the company-specific risk be diversified away by investing in both KGI Securities and Eastern Commercial 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 Eastern Commercial 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 Eastern Commercial Leasing, you can compare the effects of market volatilities on KGI Securities and Eastern Commercial 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 Eastern Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Eastern Commercial.
Diversification Opportunities for KGI Securities and Eastern Commercial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KGI and Eastern is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Eastern Commercial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Commercial 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 Eastern Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Commercial has no effect on the direction of KGI Securities i.e., KGI Securities and Eastern Commercial go up and down completely randomly.
Pair Corralation between KGI Securities and Eastern Commercial
Assuming the 90 days trading horizon KGI Securities is expected to generate 414.63 times less return on investment than Eastern Commercial. But when comparing it to its historical volatility, KGI Securities Public is 74.35 times less risky than Eastern Commercial. It trades about 0.01 of its potential returns per unit of risk. Eastern Commercial Leasing is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Eastern Commercial Leasing on September 14, 2024 and sell it today you would lose (45.00) from holding Eastern Commercial Leasing or give up 29.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KGI Securities Public vs. Eastern Commercial Leasing
Performance |
Timeline |
KGI Securities Public |
Eastern Commercial |
KGI Securities and Eastern Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KGI Securities and Eastern Commercial
The main advantage of trading using opposite KGI Securities and Eastern Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGI Securities position performs unexpectedly, Eastern Commercial 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 Eastern Commercial will offset losses from the drop in Eastern Commercial's long position.KGI Securities vs. Srinanaporn Marketing Public | KGI Securities vs. Chow Steel Industries | KGI Securities vs. Tipco Foods Public | KGI Securities vs. Business Online PCL |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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