Correlation Between Sugi Holdings and Keck Seng

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

By analyzing existing cross correlation between Sugi Holdings CoLtd and Keck Seng Investments, you can compare the effects of market volatilities on Sugi Holdings and Keck Seng 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 Sugi Holdings with a short position of Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sugi Holdings and Keck Seng.

Diversification Opportunities for Sugi Holdings and Keck Seng

0.07

Correlation Coefficient

Sugi Holdings  Keck Seng

Significant diversification

The 3 months correlation between Sugi and Keck is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sugi Holdings CoLtd and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments and Sugi Holdings 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 Sugi Holdings CoLtd are associated (or correlated) with Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of Sugi Holdings i.e., Sugi Holdings and Keck Seng go up and down completely randomly.

Pair Corralation between Sugi Holdings and Keck Seng

Assuming the 90 days horizon Sugi Holdings is expected to generate 1.68 times less return on investment than Keck Seng. But when comparing it to its historical volatility, Sugi Holdings CoLtd is 3.25 times less risky than Keck Seng. It trades about 0.23 of its potential returns per unit of risk. Keck Seng Investments is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Keck Seng Investments on October 27, 2024 and sell it today you would earn a total of  2.00  from holding Keck Seng Investments or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sugi Holdings CoLtd  vs.  Keck Seng Investments

Sugi Holdings CoLtd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sugi Holdings CoLtd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sugi Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Keck Seng Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keck Seng Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Keck Seng is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sugi Holdings and Keck Seng

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

The idea behind Sugi Holdings CoLtd and Keck Seng Investments 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.