Correlation Between Preferred Bank and Keck Seng
Can any of the company-specific risk be diversified away by investing in both Preferred Bank 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 Preferred Bank and Keck Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Preferred Bank and Keck Seng Investments, you can compare the effects of market volatilities on Preferred Bank 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 Preferred Bank with a short position of Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Preferred Bank and Keck Seng.
Diversification Opportunities for Preferred Bank and Keck Seng
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Preferred and Keck is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Preferred Bank 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 Preferred Bank 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 Preferred Bank 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 Preferred Bank i.e., Preferred Bank and Keck Seng go up and down completely randomly.
Pair Corralation between Preferred Bank and Keck Seng
Assuming the 90 days horizon Preferred Bank is expected to under-perform the Keck Seng. But the stock apears to be less risky and, when comparing its historical volatility, Preferred Bank is 2.64 times less risky than Keck Seng. The stock trades about -0.38 of its potential returns per unit of risk. The Keck Seng Investments is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Keck Seng Investments on October 12, 2024 and sell it today you would earn a total of 3.00 from holding Keck Seng Investments or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Preferred Bank vs. Keck Seng Investments
Performance |
| Timeline |
| Preferred Bank |
| Keck Seng Investments |
Preferred Bank and Keck Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Preferred Bank and Keck Seng
The main advantage of trading using opposite Preferred Bank and Keck Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Preferred Bank 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.| Preferred Bank vs. Keck Seng Investments | Preferred Bank vs. PennyMac Mortgage Investment | Preferred Bank vs. PennantPark Investment | Preferred Bank vs. GBS Software AG |
| Keck Seng vs. Marriott International | Keck Seng vs. Hyatt Hotels | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. INTERCONT HOTELS |
Check out your portfolio center.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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