Correlation Between Keppel and Yoma Strategic

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

By analyzing existing cross correlation between Keppel Limited and Yoma Strategic Holdings, you can compare the effects of market volatilities on Keppel and Yoma Strategic 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 Keppel with a short position of Yoma Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keppel and Yoma Strategic.

Diversification Opportunities for Keppel and Yoma Strategic

-0.11

Correlation Coefficient

Keppel  Yoma Strategic

Good diversification

The 3 months correlation between Keppel and Yoma is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Keppel Limited and Yoma Strategic Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoma Strategic Holdings and Keppel 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 Keppel Limited are associated (or correlated) with Yoma Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoma Strategic Holdings has no effect on the direction of Keppel i.e., Keppel and Yoma Strategic go up and down completely randomly.

Pair Corralation between Keppel and Yoma Strategic

Assuming the 90 days horizon Keppel Limited is expected to generate 0.69 times more return on investment than Yoma Strategic. However, Keppel Limited is 1.45 times less risky than Yoma Strategic. It trades about 0.03 of its potential returns per unit of risk. Yoma Strategic Holdings is currently generating about -0.23 per unit of risk. If you would invest  1,001  in Keppel Limited on October 8, 2024 and sell it today you would earn a total of  7.00  from holding Keppel Limited or generate 0.7% return on investment over 90 days.

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

Keppel Limited  vs.  Yoma Strategic Holdings

Keppel Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keppel Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Keppel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Yoma Strategic Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yoma Strategic Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Keppel and Yoma Strategic

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

The idea behind Keppel Limited and Yoma Strategic Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.