Correlation Between KCE EL and CAIRN HOMES

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

By analyzing existing cross correlation between KCE EL PCL and CAIRN HOMES EO, you can compare the effects of market volatilities on KCE EL and CAIRN HOMES 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 KCE EL with a short position of CAIRN HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE EL and CAIRN HOMES.

Diversification Opportunities for KCE EL and CAIRN HOMES

0.0

Correlation Coefficient

KCE EL  CAIRN HOMES

Pay attention - limited upside

The 3 months correlation between KCE and CAIRN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KCE EL PCL and CAIRN HOMES EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIRN HOMES EO and KCE EL 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 KCE EL PCL are associated (or correlated) with CAIRN HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIRN HOMES EO has no effect on the direction of KCE EL i.e., KCE EL and CAIRN HOMES go up and down completely randomly.

Pair Corralation between KCE EL and CAIRN HOMES

If you would invest  215.00  in CAIRN HOMES EO on October 10, 2024 and sell it today you would earn a total of  21.00  from holding CAIRN HOMES EO or generate 9.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

KCE EL PCL  vs.  CAIRN HOMES EO

KCE EL PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KCE EL PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KCE EL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CAIRN HOMES EO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CAIRN HOMES EO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CAIRN HOMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KCE EL and CAIRN HOMES

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

The idea behind KCE EL PCL and CAIRN HOMES EO 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.