Correlation Between ALT Telecom and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both ALT Telecom and KCE Electronics 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 ALT Telecom and KCE Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALT Telecom Public and KCE Electronics Public, you can compare the effects of market volatilities on ALT Telecom and KCE Electronics 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 ALT Telecom with a short position of KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALT Telecom and KCE Electronics.
Diversification Opportunities for ALT Telecom and KCE Electronics
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ALT and KCE is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ALT Telecom Public and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public and ALT Telecom 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 ALT Telecom Public are associated (or correlated) with KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of ALT Telecom i.e., ALT Telecom and KCE Electronics go up and down completely randomly.
Pair Corralation between ALT Telecom and KCE Electronics
Assuming the 90 days trading horizon ALT Telecom Public is expected to generate 0.67 times more return on investment than KCE Electronics. However, ALT Telecom Public is 1.48 times less risky than KCE Electronics. It trades about 0.15 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.54 per unit of risk. If you would invest 107.00 in ALT Telecom Public on September 13, 2024 and sell it today you would earn a total of 4.00 from holding ALT Telecom Public or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALT Telecom Public vs. KCE Electronics Public
Performance |
| Timeline |
| ALT Telecom Public |
| KCE Electronics Public |
ALT Telecom and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALT Telecom and KCE Electronics
The main advantage of trading using opposite ALT Telecom and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALT Telecom position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' long position.| ALT Telecom vs. Taokaenoi Food Marketing | ALT Telecom vs. Bangkok Sheet Metal | ALT Telecom vs. Rich Sport Public | ALT Telecom vs. Porn Prom Metal |
| KCE Electronics vs. Land and Houses | KCE Electronics vs. Delta Electronics Public | KCE Electronics vs. The Siam Cement | KCE Electronics vs. Bangkok Bank Public |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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