Correlation Between Forth Public and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Forth Public 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 Forth Public and KCE Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forth Public and KCE Electronics Public, you can compare the effects of market volatilities on Forth Public 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 Forth Public with a short position of KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Public and KCE Electronics.
Diversification Opportunities for Forth Public and KCE Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Forth and KCE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Forth 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 Forth Public 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 Forth 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 Forth Public i.e., Forth Public and KCE Electronics go up and down completely randomly.
Pair Corralation between Forth Public and KCE Electronics
Assuming the 90 days trading horizon Forth Public is expected to generate 1.52 times more return on investment than KCE Electronics. However, Forth Public is 1.52 times more volatile than KCE Electronics Public. It trades about -0.14 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.61 per unit of risk. If you would invest 1,250 in Forth Public on September 12, 2024 and sell it today you would lose (140.00) from holding Forth Public or give up 11.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forth Public vs. KCE Electronics Public
Performance |
| Timeline |
| Forth Public |
| KCE Electronics Public |
Forth Public and KCE Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forth Public and KCE Electronics
The main advantage of trading using opposite Forth Public and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forth Public 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.| Forth Public vs. PTT Global Chemical | Forth Public vs. Dohome Public | Forth Public vs. The Navakij Insurance | Forth Public vs. Pato Chemical Industry |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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