Correlation Between Kee Tai and Powertech Industrial
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial Co, you can compare the effects of market volatilities on Kee Tai and Powertech Industrial 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 Powertech Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Powertech Industrial.
Diversification Opportunities for Kee Tai and Powertech Industrial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kee and Powertech is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Powertech Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech Industrial 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 Powertech Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powertech Industrial has no effect on the direction of Kee Tai i.e., Kee Tai and Powertech Industrial go up and down completely randomly.
Pair Corralation between Kee Tai and Powertech Industrial
Assuming the 90 days trading horizon Kee Tai is expected to generate 10.89 times less return on investment than Powertech Industrial. But when comparing it to its historical volatility, Kee Tai Properties is 2.1 times less risky than Powertech Industrial. It trades about 0.04 of its potential returns per unit of risk. Powertech Industrial Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,755 in Powertech Industrial Co on September 1, 2024 and sell it today you would earn a total of 330.00 from holding Powertech Industrial Co or generate 11.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Powertech Industrial Co
Performance |
| Timeline |
| Kee Tai Properties |
| Powertech Industrial |
Kee Tai and Powertech Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Powertech Industrial
The main advantage of trading using opposite Kee Tai and Powertech Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Powertech Industrial 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 Powertech Industrial will offset losses from the drop in Powertech Industrial'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 |
| Powertech Industrial vs. BES Engineering Co | Powertech Industrial vs. Continental Holdings Corp | Powertech Industrial vs. Kee Tai Properties | Powertech Industrial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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