Correlation Between Central Retail and KGI Securities
Can any of the company-specific risk be diversified away by investing in both Central Retail and KGI Securities 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 Central Retail and KGI Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Retail and KGI Securities Public, you can compare the effects of market volatilities on Central Retail and KGI Securities 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 Central Retail with a short position of KGI Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Retail and KGI Securities.
Diversification Opportunities for Central Retail and KGI Securities
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Central and KGI is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Central Retail and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and Central Retail 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 Central Retail are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of Central Retail i.e., Central Retail and KGI Securities go up and down completely randomly.
Pair Corralation between Central Retail and KGI Securities
Assuming the 90 days trading horizon Central Retail is expected to generate 2.29 times more return on investment than KGI Securities. However, Central Retail is 2.29 times more volatile than KGI Securities Public. It trades about -0.01 of its potential returns per unit of risk. KGI Securities Public is currently generating about -0.04 per unit of risk. If you would invest 3,612 in Central Retail on September 3, 2024 and sell it today you would lose (262.00) from holding Central Retail or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Retail vs. KGI Securities Public
Performance |
| Timeline |
| Central Retail |
| KGI Securities Public |
Central Retail and KGI Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Retail and KGI Securities
The main advantage of trading using opposite Central Retail and KGI Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Retail position performs unexpectedly, KGI Securities 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 KGI Securities will offset losses from the drop in KGI Securities' long position.| Central Retail vs. Premier Marketing Public | Central Retail vs. Porn Prom Metal | Central Retail vs. Mena Transport Public | Central Retail vs. Thai Life Insurance |
| KGI Securities vs. Thai Steel Cable | KGI Securities vs. Tropical Canning Public | KGI Securities vs. RB Food Supply | KGI Securities vs. Eureka Design 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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