Correlation Between Kee Tai and Information Technology
Can any of the company-specific risk be diversified away by investing in both Kee Tai and Information Technology 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 Information Technology 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 Information Technology Total, you can compare the effects of market volatilities on Kee Tai and Information Technology 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Information Technology.
Diversification Opportunities for Kee Tai and Information Technology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kee and Information is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Technology 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of Kee Tai i.e., Kee Tai and Information Technology go up and down completely randomly.
Pair Corralation between Kee Tai and Information Technology
Assuming the 90 days trading horizon Kee Tai Properties is expected to generate 1.03 times more return on investment than Information Technology. However, Kee Tai is 1.03 times more volatile than Information Technology Total. It trades about 0.01 of its potential returns per unit of risk. Information Technology Total is currently generating about 0.0 per unit of risk. If you would invest 1,570 in Kee Tai Properties on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Kee Tai Properties or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Information Technology Total
Performance |
| Timeline |
| Kee Tai Properties |
| Information Technology |
Kee Tai and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Information Technology
The main advantage of trading using opposite Kee Tai and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai position performs unexpectedly, Information Technology 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 Information Technology will offset losses from the drop in Information Technology's long position.| Kee Tai vs. Tainan Spinning Co | Kee Tai vs. Carnival Industrial Corp | Kee Tai vs. Symtek Automation Asia | Kee Tai vs. CTCI Corp |
| Information Technology vs. Wistron Corp | Information Technology vs. Wistron NeWeb Corp | Information Technology vs. Pegatron Corp | Information Technology vs. Dimerco Data System |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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