Correlation Between Com7 PCL and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Com7 PCL 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 Com7 PCL and KCE Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and KCE Electronics Public, you can compare the effects of market volatilities on Com7 PCL 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 Com7 PCL with a short position of KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and KCE Electronics.
Diversification Opportunities for Com7 PCL and KCE Electronics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Com7 and KCE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL 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 Com7 PCL 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 Com7 PCL 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 Com7 PCL i.e., Com7 PCL and KCE Electronics go up and down completely randomly.
Pair Corralation between Com7 PCL and KCE Electronics
Assuming the 90 days trading horizon Com7 PCL is expected to generate 0.8 times more return on investment than KCE Electronics. However, Com7 PCL is 1.26 times less risky than KCE Electronics. It trades about 0.07 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.38 per unit of risk. If you would invest 2,600 in Com7 PCL on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Com7 PCL or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. KCE Electronics Public
Performance |
| Timeline |
| Com7 PCL |
| KCE Electronics Public |
Com7 PCL and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and KCE Electronics
The main advantage of trading using opposite Com7 PCL and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL 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.| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
| KCE Electronics vs. Hana Microelectronics Public | KCE Electronics vs. Kasikornbank Public | KCE Electronics vs. Land and Houses | KCE Electronics vs. Indorama Ventures PCL |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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