Correlation Between KGI Securities and SCB X

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

Diversification Opportunities for KGI Securities and SCB X

0.18

Correlation Coefficient

KGI Securities  SCB X

Average diversification

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

Pair Corralation between KGI Securities and SCB X

Assuming the 90 days trading horizon KGI Securities is expected to generate 1.32 times less return on investment than SCB X. But when comparing it to its historical volatility, KGI Securities Public is 1.66 times less risky than SCB X. It trades about 0.12 of its potential returns per unit of risk. SCB X Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11,800  in SCB X Public on December 25, 2024 and sell it today you would earn a total of  650.00  from holding SCB X Public or generate 5.51% return on investment over 90 days.

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

KGI Securities Public  vs.  SCB X Public

KGI Securities Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KGI Securities Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. 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.

SCB X Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, SCB X is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with KGI Securities and SCB X

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

The idea behind KGI Securities Public and SCB X 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.