Correlation Between KGI Securities and Jack Chia
Can any of the company-specific risk be diversified away by investing in both KGI Securities and Jack Chia 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 Jack Chia 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 Jack Chia Industries, you can compare the effects of market volatilities on KGI Securities and Jack Chia 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 Jack Chia. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Jack Chia.
Diversification Opportunities for KGI Securities and Jack Chia
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KGI and Jack is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Jack Chia Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack Chia Industries 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 Jack Chia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack Chia Industries has no effect on the direction of KGI Securities i.e., KGI Securities and Jack Chia go up and down completely randomly.
Pair Corralation between KGI Securities and Jack Chia
Assuming the 90 days trading horizon KGI Securities is expected to generate 1.24 times less return on investment than Jack Chia. But when comparing it to its historical volatility, KGI Securities Public is 1.25 times less risky than Jack Chia. It trades about 0.07 of its potential returns per unit of risk. Jack Chia Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,655 in Jack Chia Industries on December 27, 2024 and sell it today you would earn a total of 220.00 from holding Jack Chia Industries or generate 2.87% 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. Jack Chia Industries
Performance |
Timeline |
KGI Securities Public |
Jack Chia Industries |
KGI Securities and Jack Chia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KGI Securities and Jack Chia
The main advantage of trading using opposite KGI Securities and Jack Chia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGI Securities position performs unexpectedly, Jack Chia 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 Jack Chia will offset losses from the drop in Jack Chia's long position.KGI Securities vs. Sabuy Technology Public | KGI Securities vs. Laguna Resorts Hotels | KGI Securities vs. Information and Communication | KGI Securities vs. Central Plaza Hotel |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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