Correlation Between Kee Tai and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Kedge Construction 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 Kee Tai and Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Kedge Construction Co, you can compare the effects of market volatilities on Kee Tai and Kedge Construction 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 Kee Tai with a short position of Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Kedge Construction.
Diversification Opportunities for Kee Tai and Kedge Construction
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kee and Kedge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction and Kee Tai 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 Kee Tai Properties are associated (or correlated) with Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Kee Tai i.e., Kee Tai and Kedge Construction go up and down completely randomly.
Pair Corralation between Kee Tai and Kedge Construction
Assuming the 90 days trading horizon Kee Tai is expected to generate 3.52 times less return on investment than Kedge Construction. In addition to that, Kee Tai is 1.19 times more volatile than Kedge Construction Co. It trades about 0.04 of its total potential returns per unit of risk. Kedge Construction Co is currently generating about 0.16 per unit of volatility. If you would invest 7,250 in Kedge Construction Co on September 1, 2024 and sell it today you would earn a total of 280.00 from holding Kedge Construction Co or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Kedge Construction Co
Performance |
| Timeline |
| Kee Tai Properties |
| Kedge Construction |
Kee Tai and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Kedge Construction
The main advantage of trading using opposite Kee Tai and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| Kee Tai vs. Hung Sheng Construction | Kee Tai vs. Chainqui Construction Development | Kee Tai vs. BES Engineering Co | Kee Tai vs. Long Bon International |
| Kedge Construction vs. BES Engineering Co | Kedge Construction vs. Continental Holdings Corp | Kedge Construction vs. Kee Tai Properties | Kedge Construction vs. Hung Sheng Construction |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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