Correlation Between Scottish Mortgage and Keck Seng

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Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and Keck Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Keck Seng Investments, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of Keck Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Keck Seng.

Diversification Opportunities for Scottish Mortgage and Keck Seng

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Scottish and Keck is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment 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 Scottish Mortgage 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 Scottish Mortgage Investment 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 Scottish Mortgage i.e., Scottish Mortgage and Keck Seng go up and down completely randomly.

Pair Corralation between Scottish Mortgage and Keck Seng

Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to generate 0.25 times more return on investment than Keck Seng. However, Scottish Mortgage Investment is 4.05 times less risky than Keck Seng. It trades about 0.49 of its potential returns per unit of risk. Keck Seng Investments is currently generating about 0.12 per unit of risk. If you would invest  1,143  in Scottish Mortgage Investment on October 29, 2024 and sell it today you would earn a total of  116.00  from holding Scottish Mortgage Investment or generate 10.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Scottish Mortgage Investment  vs.  Keck Seng Investments

 Performance 
       Timeline  
Scottish Mortgage 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scottish Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.
Keck Seng Investments 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
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.

Scottish Mortgage and Keck Seng Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Scottish Mortgage and Keck Seng

The main advantage of trading using opposite Scottish Mortgage and Keck Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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 Scottish Mortgage Investment 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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