Correlation Between KGI Securities and Phatra Leasing

Can any of the company-specific risk be diversified away by investing in both KGI Securities and Phatra Leasing 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 Phatra Leasing 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 Phatra Leasing Public, you can compare the effects of market volatilities on KGI Securities and Phatra Leasing 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 Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Phatra Leasing.

Diversification Opportunities for KGI Securities and Phatra Leasing

-0.18

Correlation Coefficient

KGI Securities  Phatra Leasing

Good diversification

The 3 months correlation between KGI and Phatra is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing 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 Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of KGI Securities i.e., KGI Securities and Phatra Leasing go up and down completely randomly.

Pair Corralation between KGI Securities and Phatra Leasing

Assuming the 90 days trading horizon KGI Securities Public is expected to generate 0.2 times more return on investment than Phatra Leasing. However, KGI Securities Public is 5.08 times less risky than Phatra Leasing. It trades about 0.0 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about -0.21 per unit of risk. If you would invest  422.00  in KGI Securities Public on December 4, 2024 and sell it today you would earn a total of  0.00  from holding KGI Securities Public or generate 0.0% return on investment over 90 days.

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

KGI Securities Public  vs.  Phatra Leasing Public

KGI Securities Public

Risk-Adjusted Performance

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Phatra Leasing Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phatra Leasing 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with KGI Securities and Phatra Leasing

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

The idea behind KGI Securities Public and Phatra Leasing 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..